Investor confidence in financial services increases across Yorkshire and the Humber, as the region leads the way for the North

26th January 2022, 4:09 pm


  • 1% of global financial services firms plan to establish or extend operations across Yorkshire and the Humber in 2022, up from 4%
  • North East and North West see a decline in investor confidence, down 3.6% and 8% respectively
  • 87% of global financial services firms plan to establish or extend operations in the UK in 2022
    • This is the highest since 2016 when financial services sentiment was first recorded; up from 50% in the spring of 2021, 45% in spring 2020 and 11% in the spring of 2019, before the pandemic hit
  • 87% of respondents said the UK offers the right environment for ESG investment

 North, WEDNESDAY 26 JANUARY 2022: EY’s latest UK attractiveness survey shows that inward investment into financial services in the North of England varies significantly across the region.

In Yorkshire and the Humber, the number of global financial services investors planning to establish or extend operations within the region in 2022 has risen, increasing from 4% in spring 2021 to 5.1% in the latest survey, carried out in November 2021. This follows the UK-wide trend, which suggests planned investment into financial services rose significantly over the course of 2021, increasing from 50% in April 2021 and picking up considerably on the low of 11% recorded in 2019 before the onset of the pandemic.

Looking at the UK as a whole, almost 90% of global financial services investors surveyed said they plan to establish or expand operations in the UK in 2022, representing the highest level of confidence since EY started attractiveness analysis.

In contrast to this, the North East and the North West have both seen a decline in global investor sentiment towards establishing or expanding financial services operations. According to the survey, in the North East, sentiment has fallen from 6% to 2.4%, and in the North West it has fallen from 8% to 0%.

Financial services firms constantly review their operating models and strategies, but the COVID-19 pandemic has forced a wholesale reassessment of virtually every aspect of a company’s business, including its investment plans. Forty-one per cent of global financial services firms surveyed in November 2021 said that the pandemic has meant they are planning to increase their investment in the UK, with 8% planning a substantial increase. This is markedly higher than in the spring of 2021 when only 6% said they were planning on raising their UK investment level.

In addition, 90% of global financial services investors now think the UK will retain the same level of attractiveness or improve over the next three years, up from 75% in spring 2021 and 50% in spring 2020.

Steve Robb, North Financial Services Managing Partner at EY, comments: “It’s encouraging that an increased proportion of global financial services firms are currently looking to grow their business in Yorkshire and the Humber. This is testament to the growth of financial services in the region and its position as a leading UK centre for banking.

“Although it is disappointing to see the North East and North West lose financial services investor confidence, over recent years both regions have materially developed their digital infrastructure and connectivity to support such investment. This is the foundation from which they will grow their attractiveness. As the North continues to recover from the pandemic, the expectation is that inward financial services investment will once again pick up.”

ESG a priority for investors, with large majority saying the UK offers the right environment

More than half (59%) of global financial services firms surveyed by EY said ESG was either the top priority or within the top three priorities of their board’s investment strategy, and only 3% claimed ESG was not on their priority list at all. Furthermore, 87% of respondents said the UK offers the right environment for ESG investment.

A country’s success in addressing the pandemic is key for investors deciding where to invest

Over half (54%) of global financial services firms surveyed said a country’s success in addressing the pandemic is currently the most important factor influencing investment location. Other key priorities for investors are the safety and security measures put in place to prevent a future major crisis, whether that be a health, environmental or cyber crisis, (38%) and the liquidity of capital markets and availability of capital (33%).

Investors also want to see the UK government prioritise ‘levelling up’

Confidence in London as the chief location for new financial services investment into the UK remains, with 54% of global firms surveyed citing the capital as the most attractive UK region in which to establish or expand financial services operations – up from 31% in the spring of 2021. Scotland, perceived as the second most attractive region for financial services investment alongside the East of England, was down slightly with 13%, a decline from 15% in spring last year.

When looking at what the UK government needs to do to further improve the UK’s attractiveness, global financial services investors suggest prioritising geographic rebalancing of the UK economy by ‘levelling up’ (54%). This is followed by improving the skills levels of the UK workforce (28%), reducing corporate taxation levels (21%) and allocating investment that will accelerate the UK’s move towards reaching Net Zero (18%).

When considering investing regionally, outside of the capital, investors are looking for improvements in the strength of business networks (64%), better access to regional grants and incentives for investment/ R&D (46%) and more availability of business partners and suppliers (41%).

The digital economy remains an important driver of UK growth post-pandemic

Given the changes brought about by COVID-19, and the almost overnight move to remote working at the beginning of the pandemic, it is unsurprising that inward investors think the digital economy remains a key driver of UK growth. However, for FS investors, it has slipped from the top spot in April 2021 (cited by 54% of investors) to second place, cited by 51% of respondents in November 2021. Business / professional services is now seen as the primary growth driver, cited by 54% of investors, with financial services remaining in third place, cited by 41%.

Steve Robb concludes: “The UK has been the top European location – and London unsurprisingly the top European city – for foreign direct investment for over twenty years. As the levelling up agenda ramps up, the UK’s regional hubs should increasingly support the deeply-established City of London, and start to benefit more from inward investment. While confidence levels have fluctuated in the North, this latest investor sentiment survey shows that amid economic downturn and recovery, investors are reassured by the maturity and stability of the UK market. In order for the UK market – with the North a key player – to continue its upward trajectory and further extend its attractiveness, it needs to continue broadening its service offerings around ESG, driving progress towards Net Zero, improving the skills levels of the UK workforce and demonstrate progress in the ‘levelling up’ agenda, so that more regions in the country benefit from what could be a boom in foreign investment and growth opportunities.”


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