UK tops EU foreign investment league

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The Independent Online

Despite a collapse in domestic investment unparalleled since the Great Depression, Britain remains a favourite with overseas investor companies, who created 20,000 jobs last year, according to Ernst & Young's latest survey of foreign direct investment.

The accountancy firm's research suggests that the UK has managed to retain its leadership within Europe, largely at the expense of Ireland, Spain and Poland, other traditional destinations for FDI. Some 678 investment projects were attracted to the UK in 2009 – a 1 per cent drop on the previous year but a much better comparative performance than in most rivals. Europe as a whole saw the number of FDI projects fall to 3,303, down from 3,718 in 2008. The largest single investor in the UK was the US, with 243 of projects, followed by France (50), Germany (49) and India (38).

Yet while the number of direct investment projects remains high, and famous British companies such as Cadbury have been targeted by foreign buyers, UN figures suggests less optimistic picture.

The UN Conference on Trade and Development reported earlier this year that FDI to the UK had been decimated by the global recession, down by 92.7 per cent, from £96.9bn to just £7bn.

Globally, China is a much larger beneficiary of inward investment and supplier of outward funds than the EU.

Sir Andrew Cahn, the chief executive of the UK Trade & Investment arm of the Department for Business, said: "The results underline the continued importance of our traditional partners such as the US."