Brexit might be dominating the headlines but latest official figures show it has done little to deter foreign institutions - particularly in Asia - investing in the UK.Data from the Office for National Statistics this week showed that foreign direct investment (FDI) rose during 2017 to its highest level since records began 12 years ago.

Asian investors lead the way on FDI to the UK

Indian investors led the way with inward stock increasing 321 per cent to £8 billion. Across Asia as a whole, stocks increased by more than a third to £128 billion with Japanese investment rising by 71 per cent to £78 billion.And the US - the UK's largest investor - also showed a significant increase in FDI stocks, increasing by 19.5 per cent to £351 billion.International Trade Secretary Liam Fox MP, said, “As we prepare to leave the European Union, foreign investors from around the globe are as confident as ever investing in the UK."The significant rise in the amount of investment from Asia is evidence that the growing economies are important partners for the UK, relationships which I am committed to developing and deepening.“Foreign direct investment has an overwhelmingly positive and transformative effect on the UK economy, bringing jobs, prosperity and growth. My international economic department is focused on ensuring that the effects are felt in every part of the country.”

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Financial services and manufacturing attract the majority of investment

Overall, the value of the UK’s FDI stocks increased year-on-year by 12.6 per cent to £1,337 billion in 2017. The nation's financial services attracted more FDI than any other sector, accounting for 28.8 per cent of total inward investment, amounting to more than £385 billion by the end of last year.But the largest growth in investment earnings was seen in the manufacturing sector, whose value was £10 billion higher in 2017 than in 2016.However, a recent report, 'FDI - Bridging the Gap', produced by EY and the Centre for Towns organisation, found a "gaping disparity between the UK’s largest cities and towns, which have been successful in attracting investors from overseas, and the smaller towns and rural areas, which have increasingly struggled to attract investment".

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The divide between cities and rural areas is growing

The report said that while FDI had increased four-fold in the UK’s 'core cities', including London, Manchester, Birmingham and Glasgow, investment elsewhere had tended to stagnate or decline. These large cities had attracted more than half of all FDI projects in the past 20 years."The good news story for Britain’s cities is in stark contrast to that for many smaller towns: former industrial towns experienced a seismic, 74 per cent fall in FDI projects between 1997 and 2013," said the report's authors."This decline shows how certain areas have been neglected by government over a long period of time – dating back to restructuring of the UK economy that began in the 1970s."Successive governments have compounded this. In 2005, Tony Blair said the future belongs to those 'Swift to adapt, slow to complain, open, willing and able to change'. Today’s report shows just how much those areas that were able to adapt have continued to benefit, while those who were unable to have fallen further behind."

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