The UK benefited from a massive surge in foreign investment in 2004, with Direct Foreign investment almost quadrupling from $20bn in 2003 to $78bn last year. In all, the UK was the second most popular destination for FDI behind the US, says a new report from Unctad

Merger and acquisition activity was the main factor behind the jump – the year saw the Santander buy up of Abbey National, while the UK based Amersham was bought by General electric of US.

A curious piece of information emerged from our analysis of the Unctad figures. For the first time in many years, the UK’s investment inflows – that’s money coming in, was greater than outflows. We say curious, because as of yet none of the media seems to have picked up on this, maybe the news has broken too recently for full analysis.

The US too, saw a major leap in FDI, from $57bn in 2003 to $96bn in 2004, while China saw an increase from $54bn to $61bn.

Europe as a whole, however, saw a sharp fall in Direct Foreign Investment, down from 339bn in 2003 to 216bn in 2004.

Flows to the European Union dropped twice as much – by more than a third – to $216bn, primarily because of sharp falls in FDI in Germany, Luxembourg and the Netherlands.

But it was a happier story in Asia, where investment inflows hit an all time high – $148bn.

© Investment & Business News 2013