Britain retains Europe's top spot for inward investment

Canary Wharf, the financial district in the city of London, is seen at sunset in this October 12, 2009 file photo. REUTERS/Jerry Lampen

LONDON (Reuters) - Britain remained Europe’s top destination for foreign direct investment in 2009, attracting more than a fifth of all new projects in the region, according to a study by accountants Ernst & Young.

Despite the recession, Britain attracted 678 investment projects last year, just 1 percent less than in 2008, the study showed.

The largest investor in Britain was the United States, followed by France, Germany and India.

“When seen in the context of 12 months during which the European economy suffered a deep recession, the resilience of the UK in securing FDI is a remarkable economic success story,” said James Close, a partner at Ernst & Young.

London remained the most popular European city for inward investment for an eighth year running, underlining the importance of business in the capital for the UK economy.

London secured 263 projects -- two more than in 2008 -- far outperforming its closest rivals in Europe. Paris came second with 99 projects and Madrid third with 55.

Ernst & Young’s “European Attractiveness Survey” showed investors preferred the security of larger economies during the recession. Germany, Italy and France all saw an increase in new projects, whereas Spain and Ireland saw a decrease.

There were even more dramatic falls in eastern European countries, with the number of new projects in Poland, Hungary, Romania and the Czech Republic down by a collective 40 percent.

Reporting by Christina Fincher; Editing by Susan Fenton