Leeds Secures Top 20 Spot For Foreign Investment Allure In The UK
Leeds has been ranked among the top 20 UK cities for foreign direct investment (FDI) attractiveness, according to a new joint report by law firm Irwin Mitchell and Cebr, highlighting the city's potential to draw a share of the billions of pounds invested into the UK from overseas.
The in-depth study into FDI has analysed the 50 largest cities in the UK and ranked their current investment attractiveness according to a newly created index* which is based on eight economic indicators in three different categories: growth potential; local skills; and local infrastructure.
According to the latest data, the UK economy has attracted £2,000 billion of FDI and in addition to creating jobs, it helps enhance productivity, competitiveness, and innovation.
Leeds secured 19th place for FDI attractiveness in the UK, with an overall index score of 34.0. The report identified Leeds' strongest attribute as local infrastructure, but its growth potential was hindered by Cebr's prediction of a mere 1.7% economic growth for the city in 2024 – almost a full percentage point lower than the fastest-growing economy, Milton Keynes.
Compared to other locations on the Yorkshire, Leeds was judged to be more attractive for FDI than all other Yorkshire cities including Sheffield, York, Doncaster, Hull, Wakefield, Rotherham, and Bradford.
The report offers three recommendations to boost economic development and FDI in the UK at both national and regional levels. These include providing quality infrastructure for transport and digital connectivity, ensuring businesses have good access to credit through a supportive financial system, and promoting sustainable economic growth to create a stable environment that attracts foreign investors.
Expert Opinion“Inward FDI is widely considered to be a key factor in promoting the domestic economy, having the potential to raise productivity and facilitate the transfer of technology. Therefore, promoting the UK as a location for FDI can help promote growth.
"In order to attract more foreign direct investment, the UK Government must focus on providing quality infrastructure, offering businesses good access to credit, and supporting sustainable economic growth. This will create an attractive environment for international investors and help the UK become a global leader in FDI.”
“The latest figures also highlight the growing importance of the environmental sector as countries and businesses increasingly work towards a low carbon economy and environmental sustainability. Though these sectors clearly attract investment as sustainability becomes more important to international investors, all businesses which have clear ESG objectives are more likely to be attractive to investors.” Bryan Bletso, partner and director of strategic growth (international)
Josie Anderson, Managing Economist at Cebr, said:
“Our league table of the most attractive UK cities to invest in saw London and the South East dominate, accounting for 10 of the top 25 spots. However, the North West also saw a number of high-performing cities, with Greater Manchester coming in sixth place, due to its strong growth potential. While the success of London and the South East in attracting investment is beneficial for the UK economy, a more even distribution across other regions would help drive economic growth across the country”.
FDI refers to investments made by foreign investors in a company located in a different country. It can take the form of greenfield investments or Mergers & Acquisitions. In 2021, the UK's inward FDI position was £2,002 billion.
The USA is the biggest source of FDI flowing into the UK. In 2021, the inward stock of FDI in the UK from United States was £676 billion, accounting for 34% of the total UK inward FDI stock.
The French investment position in the UK increased in 2021, to stand at £101 billion, up by £5 billion on 2020 levels. This puts it as the fourth largest country investor into the UK.
Irwin Mitchell provides full-service advice to overseas businesses and individuals looking to invest in the UK and has experts across jurisdictions including the US, France, India, Germany, Singapore, Israel, and China - all of which are mentioned in the report as countries leading FDI into the UK.