’Reeves’ FDI Challenge: Can the Budget Bridge Britain’s Investment Gap?

According to our latest report, the UK is in a stronger position to attract foreign direct investment (FDI) than it was a year ago.

The Investment Attractiveness Index, which we publish in partnership with the Centre for Economics and Business Research (Cebr), shows that 46 out of 48 UK cities have improved their appeal to overseas investors over the past 12 months. 

This reflects a modest economic recovery, recent government reforms, and renewed global interest in UK sectors such as technology, finance, and advanced manufacturing.

However, the report also highlights a growing imbalance: London’s dominance has strengthened, while many cities in the North West and Yorkshire continue to lag behind - held back by infrastructure challenges and skills shortages.

The West Midlands has emerged as a standout performer, with Birmingham overtaking Greater Manchester in the rankings. Solihull and Nottingham have also made significant gains, rising 11 and 8 places respectively, thanks to targeted improvements in connectivity and workforce development.

In contrast, cities such as Stockport, Sheffield, and Hull are struggling to keep pace, raising concerns about the UK’s ability to deliver balanced growth.

These findings come as the government prepares to unveil its Autumn Budget and we are calling for the Chancellor to use the improvement in attractiveness as a platform to build sustainable economic growth.

The UK is clearly moving in the right direction. But unless we address the regional disparities in infrastructure, skills, and investment autonomy, we risk reinforcing the North-South divide. The Autumn Budget is a critical opportunity to turn policy into delivery.”

Key Recommendations from the Report

• Invest in regional infrastructure to support business growth and attract FDI.
• Devolve economic powers to cities to tailor investment strategies to local strengths.
• Strengthen skills pipelines in high-growth sectors like tech, finance, and advanced engineering.
• Ensure Investment Zones move from designation to delivery, with clear governance and measurable outcomes.
• Promote a stable and open business environment to reduce uncertainty and boost investor confidence