Scottish cities tie in third spot for cash into finance sector

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Glasgow and Edinburgh have tied as the third most attractive city in the UK for foreign direct investment in financial services.

New data from accountancy and business services giant EY – released today – shows London in first place with Manchester just ahead of Scotland’s two largest cities.

For the fifth consecutive year Scotland is ranked as the second most attractive location in the UK for financial services foreign direct investment (FDI), after London.

This second place ranking is shared – for the first time since 2013 – with the north-west of England, with both locations securing seven of the UK’s 78 FDI projects in 2017 while first-placed London attracted 47, according to EY’s latest UK Attractiveness Report.

Glasgow’s solid performance has also stood the test of time with the city securing the third largest number of FDI projects for the last decade, joint with Leeds, after London and Manchester, while Edinburgh also made the top five, ranked joint fourth with Birmingham.

Sue Dawe, EY’s head of financial services in Scotland, said: “Scotland has once again proved its credentials as an attractive destination for foreign direct investment in our revered financial services industry.

“While the number of financial services FDI projects has fallen by 22 per cent from 2016 to 2017 it is worth noting the size of projects is healthy with Glasgow and Edinburgh the only two UK locations to attract projects with more than 200 jobs.

“Combined, these accounted for 40 per cent of jobs created by the top ten financial services FDI projects in the UK in 2017.”

The UK registered 78 financial services FDI projects in 2017, down from a record 106 projects the previous year, while financial services investment into Europe as a whole increased by 13 per cent.

Investor sentiment for the longer term outlook of the UK financial services industry remains largely mixed, the report noted, with 37 per cent thinking the UK’s attractiveness will decline over the next three years amid uncertainty over Brexit.

Dawe added: “It is positive to see financial services investors count education and quality of life, diversity, culture and language as their top two factors for making the UK attractive.

“However, the significant fall in financial services FDI into the UK from 2016 to 2017 acts as a reminder of the challenge ahead in terms of remaining attractive to investors in the future and greater clarity around Brexit will be vitally important.”

A report last week showed that Scotland’s financial services sector is outstripping London’s when it comes to jobs growth, after 10,000 posts were added in the past year.

The number of people employed in the financial and related professional services industry north of the Border grow by 6.6 per cent from 151,000 to 161,000 in the last year, according to research by industry body TheCityUK.