1.Main points
- Both the inward and the outward foreign direct investment (FDI) positions (stocks) increased in 2021 compared with 2020; the value of the UK’s inward position increased by £83.1 billion to £2,002.4 billion, while the outward position increased by £16.0 billion to £1,769.3 billion.
- The increase in the inward FDI position mainly reflects higher positions with the Americas (by £89.7 billion) and non-EU Europe (by £37.3 billion); the increase in the Americas was primarily from professional, scientific and technical services with the United States.
- The value of outward FDI earnings (profits) was almost three times higher in 2021 compared with 2020, rising by £85.1 billion from £49.6 billion, to £134.7 billion; this partly reflects the much lower outward FDI earnings reported in 2020, during the coronavirus (COVID-19) pandemic.
- The increase in outward FDI earnings was seen across all continents; particularly, the Americas was more than four times higher in 2021 than in 2020; this mainly reflects higher earnings reported by a few companies, compared with the low earnings values in 2020.
- Net FDI earnings (outward less inward) were much higher in 2021 (£62.9 billion) than in 2020 (negative £6.5 billion); FDI made a positive contribution to the UK’s current account in 2021, having been slightly negative in 2020.
Several factors affected FDI statistics for 2020, including disruption from the coronavirus (COVID-19) pandemic, global recession, and changes to the FDI statistical populations and sampling methods.
!
We advise caution when comparing results from 2020 with earlier years. More detail can be found in our Foreign direct investment statistics, overview of methods changes: 2020 article.Back to table of contents
2.Foreign direct investment positions
The foreign direct investment (FDI) position is the value of the stock of investment at a point in time. Figure 1 shows that the UK’s inward FDI position – the stock of FDI in the UK controlled by foreign companies – rose by £83.1 billion to £2,002.4 billion in 2021. By contrast, the value of the UK’s outward FDI position – stock of investment that UK-based companies control abroad – was £16.0 billion higher in 2021 (£1,769.3 billion) compared with 2020 (£1,753.3 billion). This means that the UK’s negative net international investment position (outward less inward positions) widened to negative £233.0 billion in 2021, compared with negative £165.9 billion in 2020.
Figure 1: The value of the inward FDI position was above £2,000 billion in 2021
Foreign direct investment outward, inward and net positions, 2012 to 2021
Inward position
Outward position
Net
2012201320142015201620172018201920202021
-50005001,0001,5002,0002,500
£ billion
2012
● Inward position: 912.9
● Outward position: 1,073.5
● Net: 160.6
Source: Office for National Statistics – Foreign Direct Investment Survey
Notes:
- This figure uses directional statistics.
- Changes to FDI statistics between 2019 and 2020 should be viewed with caution; they reflect changes in survey values and possible effects from changes to the FDI populations and sampling stratification processes.
Download this chartFigure 1: The value of the inward FDI position was above £2,000 billion in 2021
Figure 2 shows that the geographic composition of the UK’s inward FDI position had different trends by partner continent. The Americas’ FDI position was £89.7 billion higher in 2021 compared with 2020, and inward FDI values for non-EU Europe were £37.3 billion higher. For the Americas, inward FDI positions with the United States increased by £90.4 billion over that period. Microdata analysis suggests this was mainly from a few companies with large changes in professional, scientific and technical services with the United States.
Figure 2: Inward FDI positions with the Americas and non-EU Europe were the main continent increases in 2021 compared with 2020
Foreign direct investment inward positions by partner continent, 2018 to 2021
EUNon-EU EuropeThe AmericasAsiaAustralasia & OceaniaAfrica
0100200300400500600700800900
£ billion
Source: Office for National Statistics – Foreign Direct Investment Survey
Notes:
- This figure uses directional statistics.
- Changes to FDI statistics between 2019 and 2020 should be viewed with caution; they reflect changes in survey values and possible effects from changes to the FDI populations and sampling stratification processes
Download this chartFigure 2: Inward FDI positions with the Americas and non-EU Europe were the main continent increases in 2021 compared with 2020
The UK’s inward FDI position with Asia and the EU decreased by £26.3 billion and £20.3 billion respectively, between 2020 and 2021. The difference for Asia reflects lower values with Japan (by £17.8 billion). Regarding the EU, the UK’s inward FDI position with Belgium was £42.2 billion lower in 2021 compared with 2020, which was higher than the decrease for the EU total overall. For both Japan and Belgium, these positions resulted from much lower inward FDI positions reported by a few companies.
As in 2020, the UK’s inward FDI position value with the Americas was higher than with the EU in 2021. We implemented changes to the FDI statistical populations and sampling methods in 2020, and recommend using caution when comparing results since 2020 with earlier years. Some of the increase in the value of the UK’s inward FDI position with the Americas in 2020 compared with 2019 was from companies reporting higher values. However, they may also reflect our methods changes too. More detail is available in our Foreign direct investment statistics, overview of methods changes: 2020 article.Back to table of contents
3.Foreign direct investment earnings
Foreign direct investment (FDI) earnings are the profits of multinational enterprises. Outward FDI earnings are the profits that UK companies generate on their stock of investment abroad, while inward FDI earnings are those that foreign companies generate from their UK-based businesses.
The values for both outward and inward FDI earnings increased in 2021, compared with 2020. Outward earnings were almost three-times higher over that period, rising £85.1 billion from £49.6 billion, to £134.7 billion. Inward earnings increased by £15.6 billion to £71.8 billion, meaning net FDI earnings (outward less inward) were much higher in 2021 (£62.9 billion) than in 2020 (negative £6.5 billion). Therefore, FDI made a positive contribution to the UK’s current account in 2021, having been slightly negative in 2020.
Figure 3: The UK’s outward FDI earnings more than doubled in 2021 compared with 2020
Foreign direct investment outward, inward and net earnings, 2012 to 2021
Inward position
Outward position
Net position
2012201320142015201620172018201920202021
-250255075100125150
£ billion
Source: Office for National Statistics – Foreign Direct Investment Survey
Notes:
- This figure uses directional statistics.
- Changes to FDI statistics between 2019 and 2020 should be viewed with caution; they reflect changes in survey values and possible effects from changes to the FDI populations and sampling stratification processes
Download this chartFigure 3: The UK’s outward FDI earnings more than doubled in 2021 compared with 2020
Our outward FDI earnings by partner continent statistics in Figure 4 show that the values in 2021 were higher than those in 2020 in all cases. This includes the values for Australasia and Oceania and for Africa, which have been suppressed to mitigate disclosure. These increases reflect the disruption to UK outward FDI earnings from the coronavirus (COVID-19) pandemic in 2020. For example, the UK’s outward FDI earnings value with the Americas (£8.8 billion) was lower than that for the EU, non-EU Europe and Asia in 2020. However, these earnings increased the most of all continents, being more than four times higher in 2021 (£41.1 billion). Outward earnings with the EU and non-EU Europe also more than doubled between 2020 and 2021.