Over the last financial year (2008-09), foreign direct investment in the UK has risen, with 1,744 investment projects locating and expanding here. Every day, five new foreign direct investment projects make the decision to locate in the UK.

Despite some of the most difficult economic conditions for generations, the UK maintains its position as the number one destination for foreign investors in Europe, and second in the world.

And the UK is seen as an attractive commercial destination by more nations than ever before. This year 53 countries have invested in the UK, with investment projects from India increasing by 44% in the past year to become the UK's second largest source - 108 FDI projects. The USA remains the first source of investment – which this year rose by 30% to 621 projects. Other nations providing increased investment into the UK this year were Italy (up 45%), France (up 15%), Canada (up 25%) and The Gulf (up 25%).

Business Secretary Lord Mandelson said,

“What the UK has to offer is one of the best and most productive investment climates in the world.  At a time when companies across the world are tightening their belts and focusing their investment in the sectors and countries where it will bring the most benefit, these results are testament to the fundamental strengths of the UK’s economy and will prove our ability to come through this downturn stronger, and ready for success.”

Investments this year created over 35,000 new jobs (over 78,000 jobs created or safeguarded). In the past six years over 215,000 new jobs have been created due to inward investment projects (almost 500,000 jobs created or safeguarded).

Minister for Trade, Investment and Business Lord Davies said,

“International trade and investment is vital to the long term economic health of the UK. Today's results illustrate strong international confidence in the UK economy and the contribution of this investment will be critical to our ability to compete and succeed as a country in the future.”

Investment increased across a range of sectors such as advanced engineering, the creative industries, software computer and other business services - and the financial services.

• Investment projects in the UK's high tech manufacturing sector have increased this year by 18% - reinforcing the fact that the UK is the sixth largest manufacturer in the world.
• 251 HQs or European HQs were set up in the UK.
• Investment projects in the Creative Industries increased by 65%, in the Financial Services sector increased by 20%, Business Services increased by 34%, Advanced Engineering increased by 15%, Software and Computer Services increased by 36%.

This month London saw China Construction Bank - second largest bank in the world by market capitalisation set up their European HQ in London.

Speaking of the financial services, Lord Davies added, “The City of London remains fundamentally strong and attractive to overseas investors - a leading global hub for financial services and an unrivalled gateway to world markets for international companies looking for a place to grow.”

SRI Capital Advisers, advisors for financial service providers, is currently setting up in the UK from Italy. President and CEO of the SRI Group Giulio Gallazzi said, “London is the main financial community and network in Europe and one of the most important in the world. The most important solutions providers, such as banks, funds, asset management, have their main European offices in London

“Economic crises always generate a great opportunity for growth. I’d say it’s much more interesting to invest in the UK right now than during the peak of the market. London is a great melting pot, where ideas and consistent energies can really find their path for success. London is, and always will be, one of the top global centres of financial services.”

The biggest rise is in new investment projects (up 26% on last year) rather than M&As, JVs or expansions.

Sir Andrew Cahn, Chief Executive of UK Trade & Investment (UKTI) – the government’s international business development organisation – who announced the results today, said: “Investment is a significant, expensive and long-term decision for every company. UK Trade & Investment plays a key role in supporting the best international companies to invest in the UK and the UK economy is reaping the rewards.

“True, the climate remains tough and the competition remains strong. We need to work even harder to stay a global destination of choice. We are committed to ensuring the UK remains the best place to start and grow your international business – both for foreign investors, and our home grown businesses.”

To advise overseas companies looking to invest in the UK, UKTI has a network of investment experts in embassies and High Commissions across the globe. They work closely with the Inward Investment teams of the RDAs in the English regions and Devolved Administrations.

Speaking on behalf of England's Regional Development Agencies, Jeff Moore, Chief Executive of East Midlands Development Agency (emda), said:  "In the current economic climate, it is more important than ever that the RDAs and UKTI work closely to secure jobs and investment in the UK. Although the last year has been difficult for businesses, it is encouraging to see that together we have helped to create and safeguard thousands of jobs.

"The RDAs are an integral part of the sales force promoting UK plc to global business, adding significant value to the country's offer and working closely with UKTI both here and overseas. This collective effort has been a key factor in maintaining the UK's position as the main destination in Europe for inward investment during challenging global economic circumstances."

The UNCTAD Stock Report for 2007 (latest figures) confirms that the UK continues to have the highest stock of FDI in Europe at $US1,348 billion.

NOTE TO THE EDITORS

• For more information contact Fiona Cameron, UK Trade & Investment, on 020 7215 8034 or 07525 126121, fiona.cameron@ukti.gsi.gov.uk

• The 2008-09 Annual Inward Investment report is available at http://www.ukinvest.gov.uk/investmentreport08/09

About UK Trade & Investment (UKTI)

UK Trade & Investment is the UK Government's international business development organisation, supporting businesses seeking to establish in the UK and helping UK companies grow internationally. The services offered by UK Trade & Investment bring together a network of business sector specialists and support teams across England and in British diplomatic posts in some 100 markets all around the world. UK Trade & Investment works with a wide range of partner organisations in the UK, including other Government departments, RDAs and the Devolved Administrations, Business Links, Chambers of Commerce and trade associations.  For more information, visit the web site at www.uktradeinvest.gov.uk

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