Did Brexit make the UK more or less attractive to FDI?

MATCH OR THE DAY: EU 3 UK 0

Referee: World Bank

Brexit was sold as the moment Britain would become more open, more global, and more investment-friendly — “more outward-looking and more engaged with the world than ever before,” in the words of the Global Britain speech. The World bank data shows the visible result is rougher: by 2024 Britain is back in the red at -0.35% of GDP, while the EU line in the same file is positive at 6.15%.

That matters for Keir Starmer because he has inherited not a clean slate, but a country that still talks like a magnet for capital while looking patchy on one of the clearest scoreboards for inward investment. The one thing to see is this: Britain’s FDI problem is no longer a one-year wobble. It looks structural.

Click replay, score and rank to see what happened =>

As you see Britain used to be a contender. The problem now is that the good number did not stick. The UK jumps to 12.0% in 2016, drops to -0.86% by 2018, rebounds to 5.77% in 2020, then slides back to -0.35% in 2024. The EU is volatile too, but Britain’s line has the look of a side living off past success rather than future control. And once a country starts posting negative readings again, the argument changes. This is no longer about whether Brexit produced one strong season. It is about whether Britain built a dependable investment model at all.

Why?

1) PLAN

 The Brexit-era pitch was clear enough — global, open, free-trading Britain — and the government said so plainly. But investment plans are judged by mechanism, not mood music.

The stronger European economies still offered investors what Britain was making more complicated for itself: scale, depth, and a clearer sense of where the commercial map led next. A good plan should calm investors. Britain’s often asked them to believe first and price the friction later.
Plan score: UK 4/10. EU 6/10.

2) POLICY

This is where the match really turns. The sharpest analytical warning comes from the UK Trade Policy Observatory, which found that after the referendum the UK entered its longest continuous decline in inward FDI projects in that series, with a hit of roughly 16–20% against the no-Brexit counterfactual, and an even worse effect in services. That matters because services are where Britain is supposed to be clever. If your post-Brexit model makes your strongest sector less comfortable for investors, that is not a tactical slip. That is policy scoring an own goal.

Policy score: UK 3/10. EU 7/10. 

3) PERFORMANCE

 To be fair, Britain is not playing like a collapsed side. The contradiction case is real. The Department for Business and Trade says 1,375 FDI projects landed in the UK in 2024–25, creating 69,355 jobs, and EY still ranks the UK second in Europe for project count and first for FDI-linked employment. So Britain can still attract headlines. But the harder numbers remain awkward: the ONS says the UK’s inward FDI position fell in 2024, and this %GDP measure says Britain is below zero again. Good branding is helping. Structural consistency is not.

Performance score: UK 5/10. EU 7/10.

FINAL WHISTLE: EU 3, UK 0.

So the scoreline reflects the graph. Britain can still pull a crowd, still win some big moments, still land projects that flatter the table. But on this measure it is not controlling the match. Britain’s problem on FDI as a % of GDP is not just volatility. It is that the country never fully replaced the investment logic it weakened. The surface diagnosis is choppy. The deeper diagnosis is a post-Brexit model that still has not solved the tension between sovereignty politics and investor demand for scale, clarity and low friction.

That is the test for Keir Starmer. He does not simply need more announcements, more summits, or better investor relations. He needs to prove that Britain can become easy to invest in again, not merely eager to be chosen. Because if the country keeps winning the publicity while losing the pattern, the post-Brexit story will start to look less like transition and more like settlement.