UK Named Second Most Attractive Nation for Investment Behind the US

The United Kingdom has officially overtaken China and Germany to claim the title of the second most attractive country globally for international investment, according to an annual survey by PwC. Published ahead of the high-profile World Economic Forum (WEF) in Davos, this report marks a significant milestone for the UK, reflecting the country’s growing appeal to global business leaders.
The survey, involving nearly 5,000 chief executives across 109 nations, highlighted the UK’s climb to its highest-ever position in the rankings, jumping from fourth place in 2024 to second in 2025. The United States retained its leading position, with 30% of chief executives signalling it as their top choice for capital investment, while the UK garnered an impressive 14%. Germany and China followed with 12% and 9%, respectively.
This newfound confidence in the UK as a hub for business and investment comes amid a backdrop of economic challenges and global uncertainty. But what has propelled this change? And why do global CEOs now view the UK as a prime destination for their investments?
A Vote of Confidence in the UK
Rachel Reeves, serving as Chancellor of the Exchequer, was quick to champion the findings. She noted, “These latest results show global CEOs are backing Britain. The UK is one of the most attractive destinations for international investment. And it’s this investment that will help drive economic growth and improve living standards across the UK.”
Proactively promoting the UK’s investment potential, Reeves is representing Britain at the Davos summit this week. She is slated to hold a series of high-profile meetings, including with JPMorgan Chase’s Jamie Dimon and Jo Taylor, president of the Canadian pensions giant Ontario Teachers’ Pension Plan. Reeves emphasised the value of face-to-face engagement, saying, “Business leaders and investors need to know that the UK is where their businesses will flourish, so I’m meeting them face to face in Davos to make our case.”
What Makes the UK so Attractive?
According to Marco Amitrano, Senior Partner at PwC UK, the survey results indicate a “vote of confidence in the UK as a place for business and investment.” Amitrano pointed to the nation’s stability and strengths in emerging industries like technology as significant factors. He commented, “The UK’s relative stability at a time of instability should not be underestimated, nor should its strength in key sectors including technology. However, there is no room for complacency.”
Beyond macro-level stability, the UK’s consistent focus on fostering innovation and advancing technology sectors has proved enticing. Its status as a safe haven during turbulent times, coupled with Labour’s recent investment-focused policies, has only strengthened its global appeal.
Last week, the International Monetary Fund upgraded the UK’s growth forecast for this year from 1.5% to 1.6%. Experts attribute this adjustment to Labour’s increased investment spending, an improvement in household finances, and expected interest rate cuts by the Bank of England.
How Does the UK Stand Against Global Competition?
While the US continues to dominate the rankings, Germany and China, the UK’s closest competitors, face increasing hurdles. Germany, with recession looming amid political instability ahead of elections, has struggled to maintain its economic momentum. Meanwhile, China contends with domestic uncertainties and the impact of Donald Trump’s proposed sweeping taxes on imports, which have led to a volatile investment environment there.
The UK’s current political climate, marked by a majority government, offers a distinct advantage compared to its EU counterparts, which continue to wrestle with fragmented leadership. This political stability has enhanced the UK’s attractiveness as a “safe haven” for investors looking for predictability.
Significantly, sectors like green technology, artificial intelligence, and financial services provide a strong foundation for the UK. However, Amitrano warns against overconfidence, suggesting that continuous improvements to infrastructure, workforce capabilities, and technological innovations will be necessary to maintain and grow the UK’s competitive edge.
Challenges and Criticism
Despite the successes highlighted in the survey, not all responses to the current economic climate have been positive. The Labour budget from October introduced a £25bn increase in employer National Insurance contributions, raising concerns among business lobby groups. Some firms have also criticised the government’s employment bill over fears it could lead to increased operational challenges.
The chancellor has firmly defended the government’s fiscal policies, reiterating Labour’s commitment to economic stability. Still, tumultuous bond market activity earlier this month has added pressure. Reeves remained resolute in her stance, stating, “We had no alternative,” defending moves aimed at fiscal responsibility amidst broader economic volatility.
Where Do We Go from Here?
The UK’s rise to the second spot is undoubtedly a reason for optimism, but it also raises critical questions about sustaining this momentum. Increased investment and confidence cannot mask underlying challenges, including inflationary pressures and rising corporate taxes.
Reeves’ efforts at Davos, coupled with consistent upgrades from international institutions like the IMF, are steps in the right direction. Yet, as climate concerns intensify and geopolitical tensions persist, proactive planning and adaptability will remain vital.
The focus should not only be on short-term achievements but also on creating long-lasting structural advantages. By prioritising policies that encourage innovation, support sustainability, and build trust in international markets, the UK can continue to enjoy its status as a desirable investment destination.
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