The UK attracted almost £200bn in new investment in 2025, underlining the continued scale of the country’s capital markets despite a weakening share of international investment flows.
Total investment in UK assets reached £4.1tn last year, according to new figures from the City of London Corporation, an increase of 5 per cent from £3.9tn in 2024.
The figures point to a mixed picture for the British economy. Domestic investment assets expanded substantially, led by a sharp increase in public equity holdings and continued growth in business and infrastructure investment. But the UK lost ground in the increasingly competitive global battle for sovereign wealth and foreign direct investment.
UK public equities recorded the largest increase in new capital, rising £222bn, or 23 per cent, to almost £1.2tn.
Business and infrastructure investment also increased significantly, while UK government bonds remained the single largest destination for investment, with holdings approaching £1.3tn.
However, international investors directed a smaller proportion of their capital towards Britain.
Sovereign wealth funds and global public pension funds increased their worldwide investment to £215bn in 2025, up from £169bn the previous year. Yet the UK’s share of that investment fell from 13 per cent to 9 per cent.
The amount invested in the UK by sovereign investors declined by £3bn to £19bn.
Foreign direct investment also weakened sharply, falling £14bn, or 21 per cent, to £54bn.
The decline was attributed to 51 fewer investment projects across the country, with a particular reduction in projects worth more than £1bn. Scotland and the North East experienced the largest falls.
Renewable energy nevertheless remained a significant attraction for overseas capital. Investment in the sector rose by £2bn, or 11 per cent, to £21bn, making it the largest destination for foreign direct investment.
The figures will add to concerns over Britain’s ability to compete for international capital at a time when governments around the world are offering increasingly generous incentives to attract major investors.
Policy Chairman for the City of London Corporation, Chris Hayward said: “Growth in every UK postcode requires investment across our nations and regions. With deep capital markets, a large domestic savings base, and an established and growing ecosystem for international investors, the UK remains one of the world’s leading investment destinations. But the overall growth in investment masks a more complex truth which we must tackle head on: the UK is losing ground to international competitors.
“Some of this is cyclical, but we must confront adverse trends early: strengthening the UK’s offer to global investors and ensuring that domestic capital is channelled more effectively into productive UK assets.
“The investment capital is available. So are the growth opportunities. It is the shared task of HM Government, the financial and professional services industry and regulators to connect the two.”
The City of London Corporation said further action was required to sustain investment and is developing a series of initiatives designed to connect global capital with British projects.
One of the most significant is InvestConnect, an AI-enabled platform being developed in partnership with InvestConnect Global Limited and scheduled to launch in the autumn.
The platform is intended to allow institutional investors managing trillions of pounds in assets to identify and invest in UK infrastructure opportunities.
Cornwall Council, the Scottish Government and the Liverpool City Region Combined Authority have been named as the platform’s first founding opportunity partners and will help shape its development.
The City Corporation has also sought to make it easier for international financial services companies to establish or expand their British operations.
Last year it joined HM Treasury, the Office for Investment, the Prudential Regulation Authority and the Financial Conduct Authority to launch the Office for Investment: Financial Services, designed to provide a “single front door” for overseas financial services groups.
The Corporation has also secured commitments from 17 of the UK’s largest workplace pension providers to invest in domestic growth assets through the Mansion House Accord.
Together, the initiatives could mobilise £35bn of additional investment into the UK economy.
The figures underline both the strengths and vulnerabilities of Britain’s investment landscape.
At £4.1tn, the overall stock of capital invested in the UK continues to grow, demonstrating the scale of the country’s financial markets and its importance as an international investment destination.
But the fall in sovereign investment and foreign direct investment suggests Britain is facing increasing competition for global capital.
The City of London Corporation is preparing a submission ahead of the forthcoming Budget calling for measures intended to create a more dynamic investment environment.
Its priorities include easing planning restrictions, maintaining a competitive tax system and ensuring regulation remains proportionate.
The challenge for ministers will be to convert the UK’s considerable existing investment base into a stronger pipeline of new international capital — particularly as competition between advanced economies for infrastructure, technology and industrial investment intensifies.
Britain may still command trillions of pounds in invested assets, but the latest figures suggest that maintaining that position will require more than resilience alone.
