A new report by FDI Intelligence (fDi), part of the Financial Times group, called European Cities and Regions of the Future 2020/21 has confirmed that, despite Brexit, London has retained its crown as the number one European city of the future.
However, the report questions whether it will stay at the top going forward as many investors are now seeking to diversify their EU presence outside the UK and an increasing number of companies have already relocated or are putting plans in motion to ensure access to the EU single market.
In February 2019, the Dutch government revealed it was in talks with more than 250 companies about moving their operations from the UK to the Netherlands, having already secured firms including Discovery Channel, Sony and Bloomberg.
In January 2020, JPMorgan Chase began what some believe to be an exodus within London’s huge financial sector when it announced plans to expand in Paris – whose surrounding region retains the FDI’s European Region of the Future crown – buying the former BNP Paribas offices to house as many as 450 staff. In addition, firms such as Barclays, Goldman Sachs and Bank of America have been preparing for the worst case Brexit scenario by building offices in cities including Dublin, Paris and Frankfurt.
With the UK having left the EU on 31 January and a withdrawal deal in place that provides for a transition period until 31 December 2020 (this could be extended now that the world is battling the coronavirus) some light has finally been shed for both future investors and other locations seeking to close the gap on the UK’s investment hub status. All eyes will now be on London to see what the next few years will bring.
London has remained on top, helped by a weak pound
London attracted 2,257 FDI projects between October 2014 and September 2019, the highest out of all 319 cities analysed. North American investors were responsible for almost half (44%) of the total projects during this period, followed by companies from Western Europe (26%) and the Asia-Pacific region (18%).