UK is top in Europe for inward investment, but EU Referendum ‘threatens future performance’

EY’s UK Attractiveness Reportfound that the UK had retained its leading position in Europe, recording 887 Foreign Direct Investment projects in 2014.

This the largest number of FDIs secured in more than a decade and represents an increase of 11% on 2013 figures.

The UK also increased its market share of all European projects last year to 20.4%; the highest level since 2009.

In doing so it improved its performance relative to Germany, which is the second most attractive destination for FDI in Europe.

Steve Varley, EY Chairman and Managing Partner in UK & Ireland, said: “Global investors have a strong perception of the UK as an attractive place to do business.

“The relatively positive economic news from the UK, compared with other European countries, the Government’s efforts to foster FDI, and the UK’s dynamic labour market are likely contributors.”

Despite the positive figures there were also signs of growing concerns around Britain’s future in Europe.

According to the research, a referendum on EU membership is a potential risk to the UK’s future FDI performance, as 31% of investors stated that they would either reduce or freeze their planned investments up to 2017.

72% of investors surveyed described access to the European market as important, however, a majority were also clear that reform of the EU was required

This suggests that despite its relatively strong position in the global race, the UK must address this issue if it is to stay ahead of its competitors.