A boring Budget, and why Europe may welcome it

Yesterday’s Budget was, by design, uneventful. Markets barely moved, and in London, that counts as a success.

John Healey’s first statement held to the fiscal discipline set before him. He kept around £15bn of headroom, avoided large unfunded giveaways, and raised money in targeted places: a temporary rise in the bank surcharge and higher gambling duties. Gilts and sterling took it calmly. After two years in which British budgets were remembered for the wrong reasons, calm is worth a great deal.

From the Continent, the Budget looks like one half of a larger story.

The other half comes next month in Brussels. The Prime Minister has reopened the question of Britain’s relationship with Europe and says he wants serious dialogue about long-term ties. Nobody yet knows how far that will go, and at home the subject remains as divisive as ever. But in European capitals the tone has changed. What was a closed door is now, at the very least, a conversation.

The economics have never really gone away. The EU remains Britain’s largest trading partner, accounting for nearly half of all UK trade. European investors hold close to £1 trillion of assets in Britain, and British companies hold almost £800bn across Europe. That relationship doesn't need inventing, only better plumbing.

For investors, the opportunity and the risk sit side by side. Borrowing costs are still high, a rate rise is expected next week, and any Brexit renegotiation will be slow and contested. But a country that pairs fiscal restraint with a warmer line to Europe is easier to underwrite than one that offers neither.

From conversations on both sides of the Channel, my sense is that European capital has spent the past few years watching Britain rather than backing it. A quiet Budget will not change that by itself. A steady one, followed by a constructive month in Brussels, might begin to.

#UKBudget #Europe #ForeignDirectInvestment #InternationalBusiness

London is not losing ground. It is concentrating it.

The headline numbers on British inward investment this year have not been flattering. Foreign direct investment projects into the UK fell 14% in 2025. FDI value dropped by a fifth, to £54bn. Britain’s share of global sovereign capital slipped from 13% to 9%.

Read only that, and you might conclude the door is closing.

Look more closely and London tells a different story. It was the only English region to grow its FDI last year. Its share of all UK projects rose from 31% to 38%. It remains Europe’s leading city for tech investment, with more than twice as many projects as Paris. And when 360 international decision-makers were asked which global city would be most attractive over the next three years, they put London first, ahead of New York.

In my conversations with families and businesses looking at Britain, I see the same pattern. Capital is becoming more selective, not more timid. It goes where talent, law, finance and time zone sit together, and London still offers that combination better than almost anywhere.

I would add two notes of caution. Investors expect Paris to edge ahead in Europe this year, so there is no room for complacency. And when the capital wins while the regions stall, that is good news for London but an open question for Britain.

For anyone weighing a UK entry, my view is simple. London is still the front door. The more interesting conversation is what you build behind it.

Over the coming year I’ll be writing twice a week on where capital is moving, from Texas and Miami to Malta, Zurich and Tokyo, and on the relationships that move it.

#ForeignDirectInvestment #London #InternationalBusiness