Financial and professional services strategy needed for foreign investors
The UK must develop a financial and professional services strategy to unlock up to £7.7bn in additional capital from foreign sovereign investors by 2030, new research by the City of London Corporation has recommended.
Ahead of the Government’s International Investment Summit, these findings reveal that over the past decade, sovereign wealth and public pension funds who have opened a UK office have more than doubled (2.2x) their UK investments compared to the five years preceding their presence in the country. This has led to an additional £13.4bn investment across the UK in key growth areas such as infrastructure, innovative tech sectors and renewable energy with 92 investments by these firms spread across 36 different cities and towns outside London.
“Foreign direct investment (FDI) is critical to the Government’s objectives to drive economic growth, provide high-skilled jobs nationwide and increase funding for public services,” a press release from the City of London said. “However, although the financial and professional services sector generates significant FDI for the UK, traditional estimates understate the economic contribution of these investment flows. Over the past decade, £119.5bn was collectively invested by all sovereign investors with a UK presence.”
The City of London Corporation is “urging” the Government to establish a long-term financial and professional services (FPS) strategy overseen by a public-private sector FPS Council chaired by the Chancellor to target these investors. “Building on the Harrington Review of FDI, the strategy will convene the best of Government and industry to forge a path that places financial and professional Services at the heart of the UK’s inward investment, streamlining our approach and setting the foundations for a cross-sector National Investment agency.”
“The UK’s financial and professional services are the engine in the country’s economy,” Chris Hayward, Policy Chairman of the City of London Corporation, said. “It is therefore essential that the UK positions itself as the premier destination for overseas investors. The £7.7bn of additional capital from foreign sovereign investors setting up offices in the UK will serve alongside the Government’s National Wealth Fund as a crucial vehicle to drive growth not only in London but in every corner of the UK, particularly cities such as Cambridge, Sheffield, Leeds and Manchester which are at the cutting edge of biotech, fintech and life sciences – key growth industries across the globe.”
