Foreign direct investment, UK subnational estimates: 2024

• The largest increases in outward foreign direct investment (FDI) positions between the end of 2023 and the end of 2024 were recorded in London (£26.9 billion), North West England (£19.2 billion), and the West Midlands (£12 billion).

• Over half of the UK's International Territorial Level 1 (ITL1) countries and regions saw a decrease in their inward FDI position in 2024; the largest decreases were in South East England (£41.7 billion) and London (£21.0 billion), respectively.

• The single largest total increase in outward FDI position for International Territorial Level 2 (ITL2) subregions between the end of 2023 and the end of 2024 was recorded in Herefordshire, Worcestershire and Warwickshire (£17.7 billion).

• Berkshire, Buckinghamshire and Oxfordshire recorded a £22.2 billion decrease in inward FDI position at the end of 2024, the largest fall outside of the inner London regions.

• London and South East England recorded decreases in outward FDI flows greater than £20.0 billion between 2023 and 2024.

• Between 2023 and 2024, 9 of the 12 ITL1 countries and regions recorded decreases in inward FDI flows; around half of the reported decreases were greater than £5.0 billion.

The foreign direct investment (FDI) position is the financial balance sheet value of UK companies, which includes buildings, property, and equipment. FDI positions are effectively the stock of investment held at a point in time (31 December, for annual statistics).

Our methods for estimating subnational FDI apportions UK total stock values (positions) for each company using employment in each region. Therefore, this gives greater weight to locations with more jobs relative to other regions and apportions negative as well as positive values. A negative subnational FDI position does not necessarily mean that investment is leaving that region, rather the apportioned negative value for that enterprise more than offsets the positive values for the other companies with a presence in that subregion.

The value of the UK's outward FDI position at the end of 2024 was £1,856.1 billion, which was slightly higher than the value at the end of 2023, of £1,839.0 billion.

Across the UK, 8 of the 12 UK International Territorial Level 1 (ITL1) countries and regions also recorded higher outward FDI positions in the same period. The largest increases were in London (£26.9 billion), North West England (£19.2 billion) and the West Midlands (£12.0 billion), respectively (Figure 1).

London's outward position rose from £875.5 billion at the end of 2023 to £902.4 billion at the end of 2024. This means that the region accounted for just under half (48.6%) of the UK's outward FDI stock at the end of 2024, an increase of 1.0 percentage point when compared with 2023.

In contrast, four ITL1 regions experienced lower outward FDI positions in 2024 than in 2023. South East England and Yorkshire and The Humber saw the largest decreases, of £29.8 billion and £16.2 billion, respectively.

For inward FDI, 7 of the 12 ITL1 countries and regions recorded lower positions between the end of 2023 and the end of 2024. This was also reflected in the UK total inward FDI position being lower overall, £2,127.6 billion for 2024 compared with £2,203.0 billion for 2023. The largest decreases were seen in South East England and London, which fell by £41.7 billion and £21.0 billion, respectively.

These decreases were partially offset by increases in the remaining five ITL1 regions and countries. Wales and the East of England saw the largest increases in inward position, by £5.6 billion and £4.4 billion, respectively. London accounted for the highest share of inward FDI positions, with its share increasing from 48.9% of the UK total at the end of 2023 to 49.7% at the end of 2024.

FDI positions by subregion

Our subnational FDI statistics are also available for International Territorial Level 2 (ITL2) subregions. There are currently 46 ITL2 subregions in the UK, of which 36 are in England, three in Wales, six in Scotland, and one is for Northern Ireland. Our ITL2 results also include the same unallocated category that we have in our ITL1 results. Figure 2 shows the distribution across the UK for the outward FDI stock (position) at the end of 2024.

Figure 2: Eight subregions in London and South East England each accounted for more than 3.0% of all UK outward foreign direct investment in 2024

Outward foreign direct investment (FDI) positions for International Territorial Level 2 (ITL2) subregions, 2024, percentage of UK outward FDI position

Notes

1. This map does not include unallocated results, which were those FDI companies that could not be linked through the Inter-Departmental Business Register (IDBR), commercial data source, or the Business Register and Employment Survey (BRES).

2. A value of “c” is one that has been suppressed to mitigate disclosure.

Herefordshire, Worcestershire and Warwickshire recorded an increase of £17.7 billion in outward FDI position between 2023 and 2024. This is the largest value increase of any ITL2 subregion, and £7.7 billion of it is from higher investment in North America. This subregion accounted for 2.2% of the UK outward FDI total in 2024, 1.0 percentage point higher than at the end of 2023.

In contrast, Berkshire, Buckinghamshire and Oxfordshire recorded the largest decrease in outward position over the same period, of £26.2 billion. EU countries accounted for £20.1 billion of the £26.2 billion decrease in the subregion's outward FDI position. This subregion accounted for 4.7% of the UK outward total in 2024, down from 6.2% in 2023.

Looking at inward FDI, Gloucestershire and Wiltshire recorded the largest increase in the inward FDI stock value outside London at the end of 2024, rising by £17.5 billion. North American companies accounted for £17.4 billion of this growth. The subregion's share of the UK inward FDI position increased from 0.7% at the end of 2023 to 1.6% at the end of 2024 (Figure 3).

Figure 3: Six subregions each accounted for more than 3.0% of all UK inward foreign direct investment in 2024

Inward foreign direct investment (FDI) positions for International Territorial Level 2 (ITL2) subregions, 2024, percentage of UK inward FDI position

Notes

1. This map does not include unallocated results, which were those FDI companies that could not be linked through the Inter-Departmental Business Register (IDBR), commercial data source, or the Business Register and Employment Survey (BRES).

At the same time, Berkshire, Buckinghamshire and Oxfordshire recorded the largest fall in inward FDI position outside of London, of £22.2 billion, partly from an £18.8 billion fall in inward investment from Central and South Americas. This subregion accounted for 7.0% of the UK inward FDI total at the end of 2024, down from 7.8% at the end of 2023.

Foreign direct investment (FDI) flows measure the movement of funds within global enterprise groups. These are presented as net measures in our statistics, meaning that any flow from the parent company to the affiliate can be offset by any transactions of the affiliate with its parent company.

UK total outward FDI flows were lower in 2024 compared with 2023, negative £33.3 billion from positive £18.9 billion. Figure 4 shows that much of the outward FDI decrease was recorded in London and the South East of England. The net outward flow from London decreased by £36.1 billion, while for South East England it decreased by £23.2 billion. By industry, mining and quarrying companies' net outward FDI flows contributed to these decreases in both subregions.

This decrease in UK total outward FDI flows was partly offset by higher outward flows by companies in West Midlands and the East of England. The West Midlands had the UK's largest net outward FDI flow value in 2024, of £4.5 billion. This reflects increased net flows to EU countries, from negative £6.6 billion in 2023 to positive £0.4 billion in 2024. At the industry level, increased outward flows from financial and insurance companies was the main contributor.

In the East of England, the value of net outward FDI flows increased from £0.7 billion in 2023 to £2.5 billion in 2024. Flows increased to North America, from £0.6 billion in 2023 to £1.6 billion in 2024, while the net flow to EU countries was less negative. At the industry level, manufacturing companies were the main contributor, with their net outward flows increasing to £2.8 billion in 2024 from negative £0.5 billion in 2023.

Figure 5 shows that, in 2024, 9 of the 12 International Territorial Level 1 (ITL1) countries and regions received positive net inward FDI flows. London's inward flow remained positive but fell from £28.0 billion in 2023 to £10.9 billion in 2024. The next highest inward FDI flows were in the North West of England (£4.7 billion) and Wales (£3.2 billion).

The South East of England had the largest negative inward FDI flow in 2024 (negative £12.7 billion), after also being negative in 2023 (negative £3.4 billion). The UK total inward FDI flow was also lower in 2024 (£13.4 billion) compared with 2023 (£41.3 billion).

Our Foreign direct investment involving UK companies: 2024 bulletin found that higher dividend payments to parent companies reduced inward and outward reinvested earnings in 2024, when compared with 2023. These dividend payments are made by affiliates to their parent company and effectively reduce the amount of earnings affiliates can reinvest in their activity. These higher dividend payments are also reflected in our subnational results, in which we see lower or negative FDI flows.

City region

City regions are small groups of local authorities, which includes those with directly elected mayors in England, as well as other regions in Northern Ireland, Scotland and Wales with city growth deals.

Directional measurement principle

The directional measurement principle presents FDI statistics based on the direction of influence of the direct investor (parent company). These statistics are of most use when considering the direction of influence for UK-based companies and therefore in data-linking FDI to other sources of information.

Foreign direct investment (FDI)

Foreign direct investment (FDI) is cross-border investment made with the objective of establishing a lasting interest in the host economy. FDI is also defined by control relationships, where the direct investor (parent company) controls at least 10% of the voting power (ordinary shares) of the direct investment enterprise. These relationships can be measured in two directions:

• outward: the direct investment of UK-resident companies in other countries

• inward: the direct investment in the UK from non-resident companies

International Territorial Level (ITL)

International Territorial Levels (ITL) are the UK geographies classification system. This has superseded the Nomenclature of Units for Territorial Statistics (NUTS) classification system.

Position

The FDI position is the value of the stock of investment held at a point in time. These statistics are presented as the stock of FDI outside the UK that is controlled by UK-resident companies (outward) or the stock of FDI in the UK controlled by foreign companies (inward). FDI positions are net values for the investment held by the direct investor (parent company) minus reverse investment by direct investment enterprises.

Flows

Flows measure the cross-border movement of funds within multinational enterprises. FDI flows include changes in shareholdings (equity), debt and unremitted profits (re-invested earnings) associated with the stock of FDI. These are net values showing investment minus disinvestment.

Data sources

The main source of information for UK foreign direct investment (FDI) statistics is the Annual FDI Survey; separate surveys are used to collect data on inward and outward FDI. This is combined with Bank of England data for all monetary financial institutions, such as banks, and other sources for property and public corporations in FDI. Responses are used to estimate or impute FDI values for every company in the UK's inward and outward FDI populations. Since 2020, a commercial data source has been used to inform our FDI populations.

Methodological approach

We use responses to the Annual FDI Survey and link them to the Inter-Departmental Business Register (IDBR) and the Business Register and Employment Survey (BRES) to allocate FDI values to local areas. The FDI Survey collects information from reporting units on financial values of foreign direct investment, broken down by industry and partner country. As reporting units are often head offices or administrative sites, their UK‑level investment values need to be apportioned to the individual local units of a business, such as shops, warehouses, or offices.

We link survey values collected from reporting units to their associated local units according to the IDBR, which is our register of UK businesses that we can use for our statistics. The investment values from the reporting unit are then allocated to local units based on the employment in each region. This approach is similar to the methods used for our subnational estimates of international trade dataset.

For units that could not be linked to the IDBR, we attempt to identify their location using a commercial data source. If we are still unable to locate a business, we assign its FDI values to a separate "unallocated" category. Developing our data-linking using the commercial data source has reduced the number of unallocated companies, compared with estimates prior to 2020. However, this does not necessarily mean that the total unallocated value in our statistics would be lower because some unallocated companies might have relatively high FDI values.

Local unit and geographical information were not available for any FDI data that are not collected using the FDI Survey. This includes banks, bank holding companies, property, and public corporations, and therefore these FDI values cannot be apportioned in the same way. Values are instead broken down according to the number of employees working in financial businesses in each geographic area as reported by BRES, because most of this information relates to banks and bank holding companies.

More information on strengths, limitations, appropriate uses, and how FDI data were created is available in our Foreign direct investment quality and methodology information (QMI).

Interpreting these statistics

Care should be taken when comparing subnational values in the years since 2020 with those between 2015 and 2019. We enhanced our FDI population using a commercial data source from 2020 onwards. This can be seen in these subnational results by the change in the unallocated values up to 2019 compared with those since 2020.

For example, the unallocated outward FDI position was much lower in 2020 (£2.1 billion) than in 2019 (£46.8 billion). This may have also adjusted the relative proportions of the UK countries and regions for years since 2020 compared with those up to 2019.

Statistical designation

These statistics are labelled as official statistics in development. They are based on information from our annual FDI Survey, IDBR, BRES, and a commercial data source. We are developing how we produce these statistics to improve their quality. Once these are completed, we will review the statistics with the Statistics Head of Profession.

If the statistics meet trustworthiness, quality and value standards based on user feedback, we will remove the "official statistics in development" label to publish under the "official statistics" label.

If they do not meet trustworthiness, quality, and value standards, we will further develop them and may stop producing them.

If they were "accredited official statistics" before the start of the developments, we will ask the Office for Statistics Regulation (OSR) to reassess and re-accredit them.

We will inform users of the outcome of our (and any) OSR review, as well as any changes.