Sentiment shifts

Overseas financial services investment slows

Glasgow IFSD

Investment in the financial services sector is declining (pic: Terry Murden)

Foreign investment into UK financial services is expected to slow over the next 12 months as the Covid pandemic shifts investor sentiment.

Last year investor sentiment firmly placed Financial Services as the driving force of UK growth, and the sector attracted 99 projects, equating to more than a quarter of FDI in the sector across Europe.

However, EY’s latest UK Attractiveness analysis for Financial Services indicates that amid the pandemic investors are looking to prioritise investment in the digital economy, with the real estate and healthcare industries also rising in prominence, at least in the short term.

Investor sentiment on short-term investment plans into the UK has fallen over the course of this year, and the number of overseas companies planning to invest in the next 12 months has dropped to 25% from a ten-year high of 31% in April.

Within financial services, there has also been a fall, and only 10% of overseas firms are now planning to establish or expand their operations in the UK in the coming year.

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