UK Urged to Broaden Global Capital Strategy Amidst Shifting FDI Landscape and Regional Declines

A new report by Barclays, titled “Building an investment-led growth model: A new blueprint for attracting global capital into the UK,” suggests that the United Kingdom’s current strategy for attracting foreign capital is too narrowly focused on Foreign Direct Investment (FDI). According to the report, FDI accounts for only about one-fifth of the total foreign capital stock in the UK, with foreign portfolio investment (FPI) and cross-border deposits making up the remaining 80%. Lord Richard Harrington of Watford, author of the 2023 Harrington Review of Foreign Direct Investment, supports a broader, more deliberate, and data-driven strategy to enhance the UK’s reputation as a global financial center and support business growth.

This call for a refocused strategy comes amidst a complex global FDI landscape. While global FDI flows increased by 14% in 2025 to $1.6 trillion, this recovery is described as fragile, largely driven by transit financial transactions, with a notable preference for developed European markets and technology-intensive projects.

However, not all regions are experiencing positive trends. The Philippines, for example, saw a significant decline in FDI net inflows, which plummeted by 35% to US$1 billion in the first two months of 2026, compared to US$1.6 billion in the same period last year. Data from the country’s central bank attributes this downturn to tighter global financial conditions, escalating geopolitical risks, and intensifying competition for investments.

Meanwhile, the Republic of Moldova’s economy, as analyzed in the Invest Moldova Agency’s “Study 5.0,” attracted a net FDI inflow of €409 million in 2025, a level close to 2024 (€424 million) and above 2023 (€334 million), pushing the total cumulative stock past €5.37 billion. This indicates a consolidation phase of existing investments, primarily from reinvested profits, but the attraction of new capital remains limited, underscoring the need for intensified efforts to secure major new projects. European capital predominantly influences Moldova’s economy.