UK climbs FDI rankings as AI and clean energy booms, McKinsey says

McKinsey reports the UK was the third-largest destination for newly announced FDI projects in 2022–25, driven largely by large AI and clean energy investments, with inflation-adjusted inflows averaging about $85 billion a year.

Britain has risen in rankings as a destination for new foreign direct investment, supported by growth in artificial intelligence and clean energy projects. McKinsey reported the UK was the third-largest destination for newly announced FDI projects between 2022 and 2025, up from fourth in 2015–19. Inflation-adjusted inflows averaged about $85 billion a year, roughly 40% higher than before the COVID-19 pandemic and stronger than the 20% global increase in announced FDI. The government has said it wants to attract more foreign investment to help address weak productivity and economic growth. Key points: - The UK was the third-largest destination for newly announced FDI projects in 2022–25, behind the United States and India. - Inflation-adjusted inflows averaged about $85 billion a year, compared with averages of $45 billion in France and $43 billion in Germany. - Much of the new FDI is concentrated in clean energy and AI deals worth more than $1 billion each, with relatively little flowing into advanced manufacturing such as batteries and semiconductors. - Around 80% of announced inflows to the UK came from Europe and the United States, and reports said the country is at risk of missing investment from the Gulf, South Korea and Taiwan. - Announced FDI in fossil fuels in the UK fell by around 80% compared with a decline of about 30% globally, a change McKinsey reported may reflect higher taxes on oil and gas companies. Summary: The findings show the UK has strengthened its position in announced FDI, largely through large AI and clean energy projects, but flows remain concentrated in a few sectors and source regions. Undetermined at this time.