The City of London Corporation noted that the drop from the £2bn of FDI attracted into the country during 2022 was due to a range of factors, such as “global market correction, high interest rates, and [a] challenging economic landscape”.
Jonathan Samuels, CEO at Octane Capital, believes that despite the level of FDI halving, it is still at a normal level: “£1bn of FDI FPS is within the normal range when looking at the averages over the past five years.
“Of course, compared to 2022, it seems like a large drop, but 2022 was artificially high due to the stalling of so many projects during the Covid years of 2020-21.”
He emphasised the need for foreign investment in the specialist finance market, and the dividends that can come from investing in the UK.
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“Ultimately, investors around the world look at all the unique advantages that the UK specialist finance industry has to offer and have decided that it represents good value.”
However, not all within the industry shared Jonathan’s sentiment. Stephen Burns, partner at Word On The Street, considers the reduction in FDI may hold more significance.
“The drop in foreign investment does/will have an impact, which we are seeing with a slightly decreased appetite from the sector, with a real focus on risk.
“I’d expect those ‘in the know’ expected the decline with the current political landscape and the conflicts in both Ukraine and Israel.”
The report detailed how the UK fintech and technology sector had received more than one-quarter of all FS projects.
“Fintech is only going one way and, with the introduction of AI into the industry, it is important to embrace it, albeit there will always be a significant element of ‘human touch’ in our industry,” said Stephen.
London continued be a top global financial centre, attracting 697 projects, taking its place above Singapore (590), Paris (420), New York (321), and Hong Kong (258).
Other regions in the UK also attracted notable investment, such as Manchester and Birmingham, with regions outside of London collectively accounting for circa 40% of total investment in projects.
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