Barclays calls for refocussed UK strategy to attract global capital

Today, Barclays has published a report calling for a refocussed UK foreign investment strategy to strengthen its position as a global investment hub, helping to deliver an investment-led growth model by attracting more high-quality international capital.

“Building an investment-led growth model: A new blueprint for attracting global capital into the UK” examines how while Foreign Direct Investment (FDI) still plays a core role in driving growth and productivity in the UK, supporting the delivery of the government’s Industrial Strategy, current policy overlooks wider forms of foreign capital.

FDI accounts for only around one-fifth of the total foreign capital stock in the UK.¹ The remaining 80% is largely made up of foreign portfolio investment (FPI) and cross-border deposits which drive growth by financing firms and government and supporting lending capacity. However, the UK lacks a strategy for retaining and growing these types of foreign capital flows.

While the UK remains a leading global investment hub, hosting over £12 trillion in foreign capital in 2025 - second only to the US - its share has declined from 8.6% in 2015 to 7.0% in 2025, as other jurisdictions have intensified their efforts to attract broader forms of foreign capital.² Had the UK maintained its 2015 share, it would today be hosting around £2.5 trillion more foreign capital.³

The report concludes that while the UK’s fundamentals remain strong, capital can no longer be assumed to come to the UK by default - attracting international capital over the next decade will require a more deliberate and coordinated approach.

Barclays sets out four policy shifts required to build an investment-led growth model:

1. Broaden the UK’s investment strategy beyond FDI

• Government should broaden its approach to foreign investment attraction beyond FDI, explicitly incorporating portfolio investment and cross border deposits within a single, data driven strategy for attracting global capital.
  
  

2. Reposition the UK as the leading open market for global capital

• The UK needs a clearer and more confident global narrative - particularly in a world characterised by heightened geopolitical tensions - positioning itself as the world’s most open major economy for global capital across the full investment journey.
  
  

3. Provide greater policy certainty to support reinvestment

• With reinvestment rates among international corporates trending downwards, policy should focus on stability and predictability, enabling investors to commit sustained long-term investment, supporting an ambition to lift the national investment rate towards 22% of GDP, in line with the G7 average.⁴

4. Adopt a more targeted and deliberate approach across investor types

• With other countries closing the gap with the UK in terms of foreign investment, the UK’s investment attraction strategy must become more targeted and prescriptive. The report argues that:
• In addition to FDI wins, FPI wins should be made an official key performance indicator of UK government
• The UK should develop a standalone, coordinated strategy to attract and retain multinational corporate treasury centres.
  
  
• Government should sharpen FDI strategy to reflect the rising importance of new investment partners, while renewing links with existing ones, including the EU, setting a target for 95% of emerging market’s top 100 investors to have presence in the UK by 2030, up from less than half today.⁵

C.S. Venkatakrishnan, Group Chief Executive at Barclays, said:“Foreign investment plays a critical role in supporting UK economic growth. While we have a long history as a prime destination for international capital, we must now fight more assertively for our place in an increasingly competitive world. This requires a long-term, comprehensive strategy on attracting investment with a clearer focus on the real prize – increasing portfolio investment and cross-border flows. Predictable policy, regulatory and business environment boosts investor confidence, underpinned with a clearer story on our advantages as a home for global capital flows”

Lord Richard Harrington of Watford, author of the 2023 Harrington Review of Foreign Direct Investment, said: “In my 2023 Review, I set out the need for a more strategic, coordinated approach to attracting foreign direct investment into the UK. This report makes an important and timely contribution by broadening that lens - highlighting that investment today is about the full spectrum of global capital. If the UK is to deliver an investment-led growth model, it must not only remain open, but be more deliberate in how it attracts, retains and deploys international capital across the entire system.”

Anjalika Bardalai, Chief Economist and Director, Economic Research at TheCityUK, said: " Barclays’ research provides an important and timely contribution to the debate on how the UK attracts global capital. By considering the wider ecosystem of foreign investment in the UK, this report highlights important nuances in the headline data. While the UK continues to attract high levels of foreign capital, the underlying data shows the relative decline of its global market share, as investment grows more quickly elsewhere. In an increasingly competitive global environment, it is vital that the UK adapts and strengthens its approach to attracting and retaining foreign capital, particularly given its strong foundations to do this so well.”

Anette Spencer, Chief Executive of the Association of Corporate Treasurers (ACT) said:“The ACT welcomes Barclays’ report on ‘Building an investment-led growth model’, and especially the recommendation that the UK Government should develop a standalone, coordinated strategy to attract and retain the next generation of corporate treasury centres. This recognises the important role of corporate treasury centres within the broader financial ecosystem, not only as clients of financial firms but also in boosting demand for fintech and ancillary professional services such as accounting, law and insurance. It would also help to reinforce the UK’s reputation as a global financial centre and provide tangible evidence of the Government’s policy to support business.”

The full report can be found here.

Barclays’ Group Policy Development team creates public policy thought leadership content on behalf of Barclays. Our work draws on the bank’s expertise, data and insights, and is intended to inform the design and application of public policy solutions in response to pressing economic and societal challenges. The report is general in nature and provided for information/educational purposes only.

ENDS

Notes

¹ ONS, Balance of payments, March 2026.

_² Barclays analysis based on IMF international investment position data.

³ For the purposes of the calculation, we take the UK’s 8.6% share of foreign capital in 2015 and hold that proportion to 2025. The total pool of foreign capital globally amounted to $231.6 trillion in 2025. An 8.6% share would equate to $19.8tn, $3.6tn greater than the UK’s actual 2025 value. When converted into GBP using an exchange rate of 1.35 (as of 31 December 2025), this would amount to £2.6 trillion.

⁴ ONS. Business investment in the UK: October to December 2025 revised results. March 2026. Group of Seven (G7) countries refer to: Canada, France, Germany, Italy, Japan, the UK and the US.

⁵ UNCTAD, World Investment Report, 2025. Annex tables 19 and 20. Based on this data, Barclays analysis shows that around half of the world’s top 100 non‑financial corporations from developing and transition economies - ranked by total foreign assets - have a UK presence (49 firms), while a slightly larger share (51) do not. This contrasts sharply with the top 100 global MNCs (predominantly from advanced economies), where a UK presence is almost universal.

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