‘Golden Triangle’ Maintains London’s FDI Edge As The Midlands Shines And The North Struggles

The challenge of spreading London’s foreign direct investment (FDI) success to the rest of the UK has been brought into sharp focus in a new report which predicts many Northern cities are still struggling to close the gap.

Law firm Irwin Mitchell’s Investment Attractiveness Index, which is produced by the Centre for Economics and Business Research (Cebr), says that although 46 out of 48 cities are more attractive to FDI compared to a year ago, London’s already dominant position has become even stronger.

Boosted by its status as a global financial centre, tech hub, and magnet for international talent, the report says London’s high score of 76.7 also reflects its favourable location within the so-called high growth region of the ‘Golden Triangle’, which includes Cambridge and Oxford. 

The Midlands region has also performed well generating the most significant improvements in the latest index. Birmingham has overtaken Greater Manchester, while Solihull and Nottingham have made notable gains—rising 11 and eight places respectively—highlighting the region’s strengthening skills base.

In contrast, several cities in the North West (Stockport) and Yorkshire (Sheffield and Hull) are struggling to keep pace. The report cites ongoing challenges in infrastructure and workforce skills as key factors likely to hinder their future ability to attract FDI.

The report recommends a renewed focus on ensuring that London’s advantages are diffused to other UK cities through improved infrastructure, devolved investment tools, and stronger regional skills pipelines.

Expert Opinion

“Our latest Investment Attractiveness Index highlights how cities such as London, Edinburgh, and Oxford continue to perform strongly, supported by skilled workforces, world-class universities, and knowledge-intensive clusters. These advantages have underpinned the UK’s success in high-value sectors such as technology, finance, and advanced engineering, which together account for a large share of FDI projects.

“London’s global appeal continues, however this report highlights the urgent need to extend that success beyond the capital. While the North/South divide remains a concern, there are positive signs that regions such as the West Midlands are beginning to punch above their weight, drawing a disproportionate share of foreign investment thanks to targeted improvements in skills and connectivity. By building on these successes and fostering greater collaboration, we can ensure that all regions benefit from the UK’s FDI potential.

“To truly unlock the UK’s FDI potential, we need a coordinated national effort—investing in infrastructure, upskilling local workforces, and devolving powers to cities so they can shape their own economic futures. This is how we build a more balanced, resilient, and competitive UK economy.”
Bryan Bletso, Head of International at Irwin Mitchell

Other key recommendations from the report include

• Deepen workforce skills, strengthen research collaboration, and expand training pipelines in growth sectors to attract cutting-edge investment and create high-quality jobs across the country.
• Maintain London’s global competitiveness while ensuring its advantages are shared more widely, particularly through improved infrastructure and devolved investment tools.
• Ensure Industrial Strategy Zones move beyond designation towards effective delivery, with clear governance, outcome-based monitoring, and integration into regional economic strengths.
• Promote a stable and open business environment by ensuring policy stability, reducing uncertainty, and strengthening trade relationships.

Pushpin Singh from Cebr added:

“Our research shows that the UK’s FDI landscape has strengthened on the back of a modestly improved economic outlook compared with this time last year, despite ongoing domestic and global headwinds. However, the recovery remains uneven: while some cities are seeing renewed growth, with the capital once again leading the way, others continue to lag. Converting this relative improvement into a sustained, nationwide upswing will require further targeted action to close these gaps.”