London bucks European trend to attract rise in digital foreign investments

The UK attracted greater than 700 Foreign Direct Funding initiatives in 2025, making it the second most tasty market in Europe – although a lot of the continent continues to see falling charges of abroad funding, a brand new examine from EY reveals. Nevertheless, London stays Europe’s main metropolis for tech funding, and bucked that trend, seeing a rise of 5% in 2025.

A foreign direct funding (FDI) is an funding in the type of a controlling possession in a enterprise, in actual property or in productive property equivalent to factories in one nation by an entity primarily based in one other nation. The cumulative worth of FDIs world wide had fallen steeply in the years earlier than the pandemic – crashing to a decade-long low in 2018 – however has been rebounding quickly since. In 2021, the extent of FDIs had already elevated to greater than $2 trillion, for the primary time since 2016.

The UK has among the many main beneficiaries of that rallying market. And whereas different research have lately emphasised a slide in the UK’s attractiveness to FDIs, new analysis from EY suggests the nation stays on the forefront of the continent, when it comes to welcoming abroad funds.

Supply: EY European Funding Monitor

The UK secured 730 FDIs throughout all sectors in 2025 – narrowly behind France’s 852, and forward of Germany’s 548. This continued a decline in every of these main markets – having seen 1,194, 985 and 733 offers respectively in 2023.

Nevertheless, in the expertise and IT companies sector, the UK leads the way in which – with 155 FDI initiatives, forward of France (104 initiatives) and Germany (102 initiatives). This meant that the UK secured round 18% of technology-related FDI initiatives in Europe final yr.

London satisfaction

That is thanks in half to London – which remained Europe’s high metropolis for attracting tech funding, securing 85 initiatives in 2025 – greater than twice the quantity recorded by second‑ranked Paris. This efficiency reinforces London’s lengthy‑working dominance as Europe’s main tech funding hub; over the previous 5 years, the capital has attracted 616 tech‑associated FDI initiatives, greater than double the whole secured by Paris over the identical interval.

Supply: EY European Funding Monitor

General, this helped Larger London outperform the UK and Europe-wide trend, by recording a 5% year-on-year improve in FDI initiatives in 2025. In consequence, the capital is Europe’s main area for funding for the third successive yr.  

EY contends that London has been a notable outperformer due to its entry to expertise, financing alternatives and position as an engine room for the UK’s companies financial system – underlining its significance as a nationwide funding asset. As the federal government continues to take steps to prioritise development, the Huge 4 agency additionally argued that “reinforcing regulatory stability and competitiveness will probably be important to channelling funding” into strategically necessary sectors set out in the Trendy Industrial Technique.

Anna Anthony, EY regional managing associate, for the UK and Eire, mentioned, “International commerce disruption considerably dampened investor confidence final yr, lowering FDI ranges throughout Europe and past. Towards this backdrop, it’s encouraging that the UK has retained its place as one among Europe’s main locations for funding, significantly in key sectors equivalent to expertise {and professional} companies which the federal government has recognized as being central to future nationwide development.  

“The UK stays a extremely aggressive funding vacation spot, main Europe in FDI-related job creation and attracting capital from a various world investor base.”