Foreign investment into the UK fell for the second year to its lowest since 2020, raising fresh concerns over the the country’s international competitiveness.
New figures from the Department for Business and Trade show a 12% year-on-year decline in the number of Foreign Direct Investment (FDI) projects, falling to 1,375 in 2024–2025 from 1,555 in 2023-24 and 1,654 in 2022-23. The latest figure is the lowest since 2007.
The nations and north of England fared better than the south of England with Scotland, Wales, Northern Ireland and Yorkshire & Humberside the only areas to see an uplift. In Scotland’s case, the number of projects rose to 128 from 125 in the previous year.
The overall picture will raise concerns in government amid current data showing the negative impact that higher taxes are having on the jobs market and business investment.
According to the National Centre for Universities and Business (NCUB) the data underscores the pressing need to deliver on the UK’s Industrial Strategy.
Dr Joe Marshall, the NCUB’s chief executive, said: “The latest data is particularly concerning in high-value, strategically important sectors.
“The UK saw a 43% drop in creative and media projects, a 20% fall in life sciences, biotechnology and pharmaceuticals, and a 5% decline in ICT investments—all vital to driving productivity, digital transformation and industrial modernisation. FDI into research and development also fell by 26%.
“FDI is not just capital—it brings global talent, international partnerships, and long-term confidence in the UK economy.
“Strengthening investment will be essential to deliver the Industrial Strategy and realise the UK’s ambition for innovation-led growth.
“Research and innovation are global endeavours, and FDI plays a vital role in sustaining them. The UK must become a more competitive and compelling destination to retain existing business investment and attract new, globally mobile partners.”
Chancellor Rachel Reeves said: “When I walked through the door of No11, I promised to rebuild the economy by boosting investment in Britain and creating jobs, and today’s figures show that from day one we have delivered 43,000 new jobs through the investments we have supported.
“That’s in addition to the thousands of jobs created through tens of billions of pounds worth of other investments we have attracted to our shores, including Amazon’s £40 billion vote of confidence in the UK this week – the largest single investment in the last decade.
“More money in people’s pockets through thousands of new jobs, more companies deciding on the UK as the best place to do business and expand, and communities prospering in all parts of the country – with more to come in our Plan for Change.”
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