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Foreign direct investment into the North East drops to 10-year low, research shows

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Despite the fall EY directors say there remain reasons for optimism in the North East

15:18, 24 Jun 2026Updated 15:24, 24 Jun 2026

The Newcastle skyline, viewed looking across from Gateshead towards the Tyne Bridge and the Glasshouse

The latest EY UK Attractiveness Survey has been published(Image: Newcastle Chronicle)

The North East has seen its biggest drop in foreign direct investment (FDI) projects in a decade, new research has shown. New research from accountancy firm EY shows the region chalked up 22 inward investment projects last year – a 48% year-on-year fall and the region’s lowest total across the last decade.

The figures come in the latest EY UK Attractiveness Survey, with ranked 259 regions across Europe according to the number of FDI projects each attracted in 2025. The region’s year-on-year fall in foreign direct investment meant that its overall share of UK projects fell from 4.9% in 2024 to a decade-low of 3% in 2025.

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Business and professional services was the sector that drove the North East region’s highest volume of FDI projects in 2025, with a total of five. The finance, software and IT services, and transportation manufacturers and suppliers sectors were joint-second with a total of three projects each.

Meanwhile, Newcastle was ranked the UK’s sixth best-performing city outside London for securing FDI projects with a total of 11, in line with last year’s ranking despite projects falling marginally from 13 in 2024. The majority of UK regions saw FDI projects fall year-on-year in 2025, with just Greater London (5%), Wales (56%) and Northern Ireland (65%) seeing increases. The South West saw projects stagnate year-on-year, while all other regions saw a decline.

Investment in the region was led by business services and manufacturing activities, but the number of jobs created by FDI projects fell to 998, down by a significant 47% from the 1,864 recorded in 2024. The region was ranked 11th in the UK for FDI-related employment last year, with the North East securing 3.5% of total UK FDI-related employment, down from 4.9% in 2024.

A breakdown of activity revealed that there were six business services projects, followed by five within manufacturing and three in logistics. A key indicator of a region’s ability to draw in fresh investment is in the number of ‘new’ projects chalked up, as opposed to re-investments or extensions.

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In 2025, the North East recorded 10 new projects, down 55% from 2024, when 22 projects were recorded. As a result, the UK market share for new projects secured by the North East decreased to 2.1% in 2025, down from 4.1% the previous year. Despite the fall, EY directors remained cautiously optimistic – but warned over the widening gap between London and the regions.

Michael Scoular, EY Newcastle office managing partner, said: “There remain reasons for optimism in the North East, including the fact that Newcastle has retained its position among the top 10 UK cities for attracting inward investment, and that the region was still able to secure several high-value projects creating more than 100 jobs each in 2025. “However, the decline in FDI projects in the North East last year was more pronounced than in any other UK region, which emphasises the need for improvement.

“There is undoubtedly a need for resilience and innovation in boosting the North East’s attractiveness as a destination for foreign investment. EY’s investor sentiment survey highlighted access to skilled workforces, robust local transport and infrastructure and access to regional grants and incentives as top priorities for global investors when considering locations outside of London – which should all be key considerations for the region going forward.

“The regional gap between London and the rest of the UK has widened, so it’s crucial that the North East builds on its industrial strengths and heritage as well as capitalising on emerging opportunities around technology, Artificial Intelligence (AI) and future talent to increase its competitiveness both nationally and globally.”

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Cigna's Valuation Gap Still Stands Out

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31 July 2026

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What I Believe Investors Are Missing With Cigna (NYSE:CI)

Cigna's Valuation Gap Still Stands Out

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Eric Trump-Backed Defense-Tech Startup Space-Eyes to Go Public Via SPAC

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10 minutes ago

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31 July 2026

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Katherine Hamilton hedcut

Space-Eyes, a drone-fighting technology firm backed by President Trump’s son Eric, plans to go public via a merger with special-purpose acquisition company McKinley Acquisition.

The company, which offers systems to detect and fight drones and has a geospatial intelligence platform, is expected to list on Nasdaq and trade under the ticker CUAS. The deal, which is expected to close in the fourth quarter of this year, gives Space-Eyes an implied enterprise value of $370 million.

Eric Trump, who is the executive vice president of The Trump Organization, is an investor and strategic advisor for Space-Eyes.

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Despite transatlantic ‘love fest’, EU charts third way in ties with US and China

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31 July 2026

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Despite transatlantic 'love fest', EU charts third way in ties with US and China
US Secretary of State Antony Blinken‘s first videoconference with European Union foreign ministers last month was so good humoured that some diplomats in Europe described it as a “love fest”.

But two senior envoys who attended said there was no direct response from the ministers gathered in Brussels when Blinken said: “We must push back on China together and show strength in unity.”

Their reticence is partly due to an unwillingness to commit to anything until Washington spells out more fully its China policy under President Joe Biden.

But the ministers were also cautious because the EU is looking for a strategic balance in relations with Beijing and Washington that ensures the bloc is not so closely allied with one of the world’s two big powers that it alienates the other.

The EU also hopes to have enough independence from Washington and Beijing to be able on its own to deepen ties with countries in the Indo-Pacific region such as India, Japan and Australia, EU officials said.

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In a new departure for the EU, they said, the bloc hopes to agree a plan next month that involves a larger and more assertive security presence in the Indo-Pacific, and more development aid, trade and diplomacy.
“We are charting a third way between Washington and Beijing,” an EU envoy in Asia said.Another EU official in Asia expressed concern that the United States had “a hawkish agenda against China, which is not our agenda”.

‘EUROPE ROADSHOW’
Last month’s videoconference was part of an attempt under Biden to rebuild alliances neglected by former U.S. President Donald Trump, who had an antagonistic relationship with both the EU and China.

The White House has embarked on a “Europe roadshow”, a senior U.S. official said, and is in daily contact with European governments about China’s rising power, in “a sustained effort for … a high degree of coordination and cooperation in a number of areas.”

In a sign that the U.S. push on China is having an impact, Germany plans to send a frigate in August to Asia and across the South China Sea, where Beijing has military outposts on artificial islands, senior government officials told Reuters.

The EU is also set to sanction four Chinese officials and one entity – with travel bans and asset freezes – on March 22 over human rights abuses in China’s Uighur Muslim minority, diplomats said.

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In a further sign, when Chinese President Xi Jinping chaired a video summit with central and eastern European countries last month, six EU member states – Bulgaria, Estonia, Latvia, Lithuania, Romania and Slovenia – sent ministers rather than heads of state.

But there is still distrust in Brussels of Washington’s approach to China, even if attitudes in Europe have hardened against China over Beijing’s crackdown in Hong Kong, treatment of Uighur Muslims and the COVID-19 pandemic, first identified in China.

The United States says China is an authoritarian country that has embarked on a military modernisation that threatens the West, and has sought to weaken telecommunications equipment maker Huawei, which it sees as a national security threat.

The U.S.-led NATO military alliance is also beginning to focus on China, but Biden’s administration is still reviewing policy.

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“We ask what their China strategy is and they say they still don’t have one,” the EU official in Asia said.

French President Emmanuel Macron highlighted concerns in some EU states last month by saying that uniting against China would create “the highest possible” potential for conflict.

‘NO ALTERNATIVE’
But the EU is hungry for new trade and sees the Indo-Pacific as offering huge potential.

The EU has a trade deal with Japan and is negotiating one with Australia. Diplomats say countries in the Indo-Pacific want the EU to be more active in the region to keep trade free and open, and to ensure they are not left facing a straight choice between Beijing and Washington.

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France committed to closer ties with allies such as Australia and India with an Indo-Pacific strategy in 2018, followed by the Netherlands, which also has its own strategy, and Germany’s looser set of “guidelines”.

The EU strategy, if agreed, could involve putting more EU military experts in EU diplomatic missions in Asia, training coast guards and sending more EU military personnel to serve on Australian ships patrolling in the Indian Ocean, diplomats said.

It is unclear how much Germany, which has close business ties to China, will commit to any new strategy. German government officials say the EU cannot afford to alienate Beijing despite labelling China a “systemic rival” in 2019.

But French Foreign Minister Jean-Yves Le Drian will travel to India in April to develop the EU’s Indo-Pacific strategy, and the EU aims to hold a summit with India this year.

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France, which has 1.8 million citizens in Pacific overseas territories, has about 4,000 troops in the region, plus navy ships and patrol boats.

“The Indo-Pacific is the cornerstone of Europe’s geopolitical path,” said a French diplomat. “There’s no alternative.”

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GM to launch its own in-vehicle AI system later this year

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23 minutes ago

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31 July 2026

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GM to launch its own in-vehicle AI system later this year

GM began rolling out Google’s Gemini in eligible model year 2022 and newer Cadillac, Chevrolet, Buick, and GMC vehicles in the U.S. earlier this year with Google Built‑in.

Courtesy GM

DETROIT – General Motors plans to launch its own in-vehicle artificial intelligence system that’s better tailored for its customers later this year.

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The new GM AI assistant is expected to be more integrated with the vehicle as well as its capabilities and telematics information than the company’s recently launched Gemini AI assistant from Google, according to Anna Santos, GM director of product management of voice and AI/machine learning.

“Later this year, we’ll be launching a more deeply integrated native AI assistant that combines conversational AI with GM vehicle knowledge and OnStar intelligence to create those capabilities that go beyond what a general purpose assistant can do,” she told CNBC.

GM last year announced the Gemini AI bot would launch this year in millions of 2022 model-year vehicles and newer, followed by a GM AI assist, but did not provide additional details on the technology.

Santos said the new GM assistant, which she declined to disclose a name for, will be able to better “understand the vehicle, the drive and our customers’ needs, and make everyday ownership simpler.”

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With Gemini, customers can speak naturally without memorizing commands or repeating context. It also is beginning to offer “live sessions” in which the bot will speak with a like a normal conversation or play games like trivia or 20 questions. It also can control some aspects of GM vehicles, such as temperature and radio controls, but in general operates like it would through a phone.

“This is the beginning of a broader AI journey for us,” Santos said. “There’s a limit to what an AI that’s just sort of sitting at the top level of the vehicle can do.”

The Detroit automaker is working with an unnamed large language model provider on its technology to assist GM and its owners with predictive maintenance, vehicle telemetry and other more auto-focused features.

That also could include commands such as “kids setting” that would tailor music, seats, heating/cooling and door lock controls for children.   

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“It’s data that’s going to be proprietary to GM, and our goal is to make sure that we’re bringing the right technology forward to enable us to build the deep vehicle expertise that we want to be able to bring to the AI assistant,” Santos said.

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Rising cheese snack producer hires new CEO

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30 minutes ago

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31 July 2026

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Rising cheese snack producer hires new CEO

Randy Johnson was previously CEO of Dot’s Pretzels.

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business put up for sale after 60 years

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37 minutes ago

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31 July 2026

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Three oil and gas companies have postponed a decision on a new North Sea development due to uncertainty over potential windfall tax increases under a prospective Labour government.

BP has put its North Sea oil and gas business up for sale, the company announced on Friday, in a move that would end 60 years of production in the region by the group.

The business has five production hubs, two in the central North Sea and three west of Shetland, and employs about 1,100 people. It produced 117,000 barrels of oil equivalent per day in 2025, against BP’s total daily production of 2.3 million barrels.

The decision follows a review of BP’s operations as it seeks to slim down the group. A sale could bring in £2bn to BP. The Financial Times reported last month that the company had been in talks with Ithaca Energy to sell the assets for around that amount, although the talks fell through.

Chief executive Meg O’Neill, who took the helm in April, said earlier this year there was “untapped potential” in the North Sea. Announcing Friday’s decision, she said: “As we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company.

“It has world-class people, resilient assets and a proud heritage, and it is precisely these qualities that can attract an owner ready to back its next chapter. We are seeking an outcome that recognizes that value.”

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“The UK has been our home for more than 100 years and will continue to play an important role in our future,” O’Neill said. “We’re proud of the jobs we create, the contribution we make to the UK economy, and the work we do to keep energy flowing every day.”

BP employs around 13,960 people in the UK and said its global headquarters will remain in the country. The company said it remained committed to operating the business safely and reliably throughout the sale process.

The announcement comes amid political debate over the future of North Sea drilling. In its 2024 general election manifesto, Labour said it would not issue new licences for drilling but would honour existing ones. Earlier this week, Prime Minister Andy Burnham said he had told US President Donald Trump he would take a “pragmatic approach” to North Sea oil and gas. “There is a resource there. When people are struggling – you can’t ignore that,” Burnham said.

Labour’s deputy leader Lucy Powell has previously told the BBC that Burnham would stick to the party’s manifesto commitments, but that there would be a “change of emphasis” on North Sea oil and gas.

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Oil and gas companies have also criticised the Energy Profits Levy, the windfall tax on North Sea producers, which they argue means the region has lost some of its appeal in recent years.

The Scottish government’s energy minister, Stephen Gethins, said the decision would cause uncertainty for workers. “Scotland’s future prosperity – and our contribution to energy security – are reliant on North Sea energy production and, crucially, the skills and experience of that workforce,” he said.

Gethins added that reserved policies, such as the Energy Profits Levy, were driving an accelerated decline of North Sea oil and gas before renewables were fully ready to meet energy needs.

The Scottish Conservatives’ energy spokesman, Andrew Bowie MP, called on the Labour government at Westminster to approve the Jackdaw and Rosebank offshore sites, cancel plans to ban new licences in the North Sea and scrap the Energy Profits Levy.

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Reform MSP Duncan Massey said 1,100 workers faced uncertainty with the sale, adding that politicians should not put ideology ahead of jobs and economic reality.

The Scottish Greens said 80 per cent of the oil from the North Sea was shipped overseas and that it was therefore “doing very little to improve our energy security”.

Jamie Young

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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Earnings call transcript: Medacta holds 2026 outlook as H1 revenue rises 9.7%

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44 minutes ago

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31 July 2026

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Earnings call transcript: Medacta holds 2026 outlook as H1 revenue rises 9.7%

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At Close of Business Podcast July 31 2026

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31 July 2026

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At Close of Business Podcast July 31 2026

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Apple faces Indian engineer’s bias lawsuit

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31 July 2026

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The Economic Times
Apple Inc. lost an early round in a discrimination lawsuit brought in the U.S. by a female engineer from India who says her two managers — one from her country, the other from Pakistan — treated her as they would in their own countries: as a subservient.

The woman’s case in California state court is the latest to allege workplace bias in Silicon Valley that focuses on cultural prejudices of some tech workers from South Asia. Cisco Systems Inc. is fighting a suit brought by California’s civil rights agency alleging bias against a member of India’s so-called lower castes, known as Dalits.

Anita Nariani Schulze is part of the Sindhi minority — she is Hindu, with ancestry in the Sindh region of what is now Pakistan. Her complaint alleges that her senior and direct managers, both male, consistently excluded her from meetings while inviting her male counterparts, criticized her, micromanaged her work, and deprived her of bonuses, despite positive performance evaluations and significant team contributions.

Schulze claims the managers’ animus reflects sexism, racism, religious bias and discrimination on the basis of national origin. The Sindhi Hindu nationality is “known for its technical acumen” and its gender equality, she says, which “exacerbated the managers’ discriminatory treatment.”

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In a tentative ruling on Wednesday, Santa Clara County Superior Court Judge Sunil R. Kulkarni rejected Apple’s request to toss out the suit. While not ruling on the merits of the case, Kulkarni said Schulze had adequately supported her legal claims. Apple had argued her claims weren’t specific enough and were based on stereotypes.

But the judge rejected Schulze’s request to represent a class of female Apple employees who suffered job discrimination over the last four years. He agreed with Apple that she didn’t show a pattern of discrimination that could be applied to a broader group.