Foreign investment in UK hits record high

24-08-2006

The number of inward investment projects in the UK has a hit a record high, according to new figures released by the government.

The Department for Trade and Industry (DTI) said there were 1,220 foreign investment projects in Britain over the 12 months to March, up 14 per cent on a year ago.

Almost 56,000 UK jobs were safeguarded as a result of the investments, although the number of new jobs created dropped 14 per cent to 34,077 due to a rise in mergers and acquisitions as opposed to the development of new projects.

The DTI report showed that mergers and acquisitions accounted for 31 per cent of the total foreign investment activity in the UK over the last financial year.

DTI officials said an increased focus on knowledge-based industries, which tend to be of high value, but which are not labour intensive, had also contributed to the fall in the number of new jobs created.

Investment in the pharmaceutical industry was also up 19 per cent to 98 projects.

The figures show that the US was the most prominent source of foreign investment in the UK last year, being responsible for 446 projects and 24,455 jobs.

Japan was the second most dominant foreign investor, with 84 projects and 31,263 jobs.

The number of UK projects financed by Asian economies also grew, with Indian investment up 111 per cent to 76 projects, creating almost 4,000 jobs.

Meanwhile China has invested in 37 UK projects over the past year, generating over 1,000 new jobs.

Trade and industry secretary Alistair Darling said the figures provided "proof that the UK is a great place to do business and the best base from which to compete internationally".

The government's latest figures reflect research released by the Organisation for Economic Co-operation and Development (OECD) last month which showed that the UK attracted more inward investment than any other country in the past year.


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