business
UK foreign direct investment projects fell 14 percent in 2025
A survey by EY recorded a 14 percent drop in overseas investment projects last year. Political instability ranked as the second-biggest concern for investors after energy costs. Greater London was the only English region to record growth.
The IndependentAudio version
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Greater London recorded the only growth among English regions while the gap between London and other areas widened. The report combined project data with an investor sentiment survey of 360 international decision-makers conducted in March and April. Political instability placed second among disadvantages for the UK as an investment location, behind energy costs.
Investor concerns and market data Survey respondents also cited labour market costs and tax competitiveness as issues. UK government bond prices have fallen and yields have risen since January amid downgrades to growth forecasts and political uncertainty.
Despite the national decline, the UK recorded the second-highest number of foreign direct investment projects in Europe with 730, behind France’s 852.
Outlook from surveyed investors More than half of respondents said they expect the UK to become more attractive over the next three years. Anna Anthony, EY UK & Ireland regional managing partner, said investor sentiment indicates the UK remains competitive globally but converting that sentiment into sustained regional investment is now the priority.
