UK FDI stock trend
The UK’s inward stock of FDI of £1.2 trillion in 2016 came mainly from the UK’s top trading partners – the EU £552 billion (46% of total), the US £294 billion (25%) and non-EU Europe £133 billion (11%) see Figure 7.7.
Note that the ONS changed its method for collecting FDI statistics from 2020 onwards and advise caution in comparing FDI data pre- and post- 2020.
By 2023, the corresponding inward FDI stock figures were EU £758 billion (35%), USA £693 billion (32%) and non-EU Europe £301 billion (14%). The US share has increased significantly, which is probably a consequence of reduced inward FDI from the EU due to the UK’s weakened relationship with the EU. However, FDI stock figures may change due to exchange rate movements independent of any changes in flows.
Figure 7.7: UK inward FDI positions by partner region, 2016 to 2023
Source: ONS, Inward foreign direct investment (FDI) involving UK companies (directional): inward, June 2025
UK inward FDI stock by sector
Inward FDI stock in 2023 was concentrated in six principal sectors accounting for 83%:
- financial services £629 billion (29%)
- professional and support services £379 billion (17%)
- manufacturing £316 billion (15%)
- retail and transport £260 billion (12%)
- information and communication £212 billion (10%)
The largest contributor to the UK’s inward FDI position was financial services industries, which have seen an increasing inward FDI position in each of the past three years; in 2023 the increase was £19 billion compared with 2022.
Information and communications industries had the largest increase over 2022, of £53 billion. However the other four sectors all showed small declines over 2022.
Figure 7.8: UK inward FDI stock by sector
Source: ONS, Inward foreign direct investment (FDI) involving UK companies (directional): inward, June 2025
Brexit impact on FDI inflows
The 2023 value of UK inward FDI flows relative to GDP experienced the sixth year of decline since 2016 -(see Figure 7.9). However, there was a slight increase in 2021. Note that 2016 was a record year for inflows due to a few high-value mergers and acquisitions.
Brexit and the associated political and economic uncertainties have delayed investment decisions and reduced annual domestic business investment. The same is likely to have applied to FDI. Nevertheless, the EU remained a significant source of inward FDI in 2023 (see Figure 7.10).
UK FDI inward flows tends to mirror global trends, which showed a decline for developed economies in 2023 over 2022, as well as in 2024 over 2023.
Figure 7.9: Trend in net FDI inflows to the UK 2014 – 2023
Figure 7.10: Sources of UK inward FDI in 2023
