As the UK and the other 27 members of the EU prepare to engage in heated negotiations over their divorce, and ahead of the deadline to initiate official proceedings slated for March 2017, it is worth looking at how the financial centres in the still legally united bloc fare in terms of appeal to foreign investors.
London remains the biggest magnet for financial services foreign direct investment (FDI). However, the contraction in capital expenditure between September 2015 and August 2016, compared with the preceding 12 months, is evident, with the June Brexit vote the biggest market-moving event of the period.
London’s 2015-16 total of $983.2m represents an almost 30% drop from the 2014-15 figure, according to estimates by greenfield investment monitor fDi Intelligence.
Conversely, Dublin – one of the European financial centres touted as a contender to scoop up the business London could lose post-Brexit – has climbed up from fourth to second place. This is thanks to significantly larger FDI volumes, up by 65% to $321.5m.
Barcelona is in third place thanks to investments by Switzerland-based insurer Zurich Group, and UK financial technology company Ebury, which is opening a new office in the city.
London retains its lead as a source of financial services FDI too and, in this case, distances itself further from second placed Paris. Over the 12 months to the end of August, the UK capital directed a total of $2.29bn towards other financial centres in Europe and beyond, compared with Paris’s $904.6m.
Previously, the two financial hubs created $2.2bn and $1.54bn of outward FDI, respectively.
