- UK falls from 3rd to 6th in Kearney’s 2026 FDI Confidence Index as Autumn Budget uncertainty still weighs on investor sentiment
- Industrial policy is now a critical factor in investment decisions, with 84% of investors citing it as extremely or very important
The United Kingdom has fallen to its lowest position since 2020 in Kearney’s annual FDI Confidence Index, dropping three places from 3rd to 6th. Uncertainty surrounding the Autumn Budget is cited as a potential driver, with Germany holding firm at 5th and Japan climbing from 4th to 3rd, taking the UK’s former spot.
The findings arrive as Prime Minister Starmer confirms a new UK-EU summit in the coming weeks, with ambitions to deepen economic cooperation. A year on from a significant escalation in global tariff measures, the data shows investors want greater stability and policy certainty alongside their existing enthusiasm for the UK’s tech innovation and economic performance.
Key findings from Kearney’s 2026 FDI Confidence Index include:
- 36% of global investors cite tech innovation as a top reason to invest in the UK, with 31% citing economic performance
- 24% of global investors view tariffs unfavourably, with 33% already redirecting investment towards lower-tariff markets in response
- 79% say frequent changes in industrial policy increase uncertainty for their investment planning
- 88% of investors globally plan to increase FDI over the next three years, signalling capital is available but competition for it is intensifying
Jim Pearce, Managing Partner for the UK and Northern and Eastern Europe at Kearney, said:
“This is a ranking the UK should be taking seriously. The competition for FDI is intensifying as investors are looking more broadly, with growing interest in Asia and emerging markets reflected in our survey results. While tech and innovation capabilities remain a genuine strength for the UK market, there are opportunities to improve performance in other areas that investors in our survey say they value most highly, including the efficiency of legal and regulatory processes alongside the ease of doing business.
“The EU summit gives the UK a real chance to improve its standing. Investors are not looking for grand gestures; what they actually want is a stable industrial policy, a simpler environment to operate in and confidence that the direction of travel is not going to change every six months.”
