The German investment position in the UK increased to £107bn in 2020. The retail sector attracted the most investment, making up 15% of the reported investment position from Germany – although this was down from 21% in 2019.
This was followed by the manufacturing and professional, scientific & technical services sectors. Some of the largest German companies investing in Britain include Siemens, Deutsche Bank and Lidl.
Meanwhile, FDI from France was primarily focussed in the manufacturing, retail and financial services sectors, making up 21%, 13% and 11% of the investment positions in the UK, respectively.
The share of FDI in all of these sectors has increased compared to 2019. Many French companies have a large UK presence.
For example, Pernod Ricard has 10 distilleries in Scotland. In the retail sector, LVMH has investments in the UK across its various brands. Generally, investments from Europe are less concentrated in the financial services industry.
Of the more than £1 trillion of European FDI, only around a quarter is invested in financial services. The disproportionally large concentration of US investments in financial services is likely the result of the activities of US banks in London.