UK levels of foreign direct investment (FDI)

Foreign direct investment involves the transfer of funds to be involved in capital investment in a foreign company. For example, if a Japanese firm, like Toyota builds a factory in the UK, this counts as inward investment into the UK.

Foreign direct investment does not include portfolio investment, e.g. Chinese saving money in UK banks or buying bonds

FDI and balance of payments

  • Inflows of inward investment count as a credit on the capital (financial) account of the balance of payments.
  • However, if profit from the investment goes back to the country of origin, then this will be a debit item on the current account.

FDI Inward position

This is the total accumulated level of foreign direct investment. For example, in 2014, the value of accumulated FDI in the UK – exceeded £1 trillion. (Gov.uk)

FDI-inward-position-uk
Source: OECD. Note  these figures are in US $ millions

 

Top 10 countries for inward investment

In 2015, the UK ranked third for total levels of inward investment

top-10-inward-investment
Source: Gov.uk

Which countries invest in the UK?

top 11 countries investing in UK

Net direct foreign investment

 

2005200620072008200920102011201220132014
Total net FDI flows in the UK96,80384,88593,14848,87548,98632,10628,88344,59633,01627,801
Total net FDI flows abroad44,45846,887159,12999,32225,09425,48660,13027,39228,424-79,936
(inflows – outflows)52,34537,998-65,981-50,44723,8926,620-31,24717,2044,592107,737

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