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The City of London’s dominance of international finance is in large part thanks to its unparalleled success at attracting foreign investors. Last year, Covid-19 and Brexit’s endgame saw its advantage over Europe in that sphere shrink to the lowest level this century.
The U.K. secured foreign direct investment for 56 financial services projects last year, compared to 99 in 2019, according to an EY survey about the U.K.’s attractiveness to financial services firms. While that still made the U.K. the most attractive destination in Europe, France was a close second with 49 projects, ahead of Germany’s 37.
While the U.K. still secured a fifth of all financial services FDI into Europe, this was down from 26.7% in 2019, the report said. That’s the narrowest the lead has been since EY started the survey in 2000.
The narrowing gap may fuel anxiety about the City’s ability to continue to capture an outsized share of foreign money now it is unable to offer seamless access to the European Union....