Edinburgh has retained its position as the UK’s second most attractive city for foreign direct investment (FDI), while Glasgow has advanced two places to seventh, according to the latest UK Investment Attractiveness Index.

The FDI report, produced by the Centre for Economics and Business Research (Cebr) alongside Scottish law firms Wright, Johnston & Mackenzie and Irwin Mitchell, compares 48 British cities to find where investment opportunities are rising, scoring them on economic growth, skills, and infrastructure.

In the latest edition, Edinburgh came second only to London, with a score of 52.0, with the study citing the city’s consistent strength across all three pillars, particularly local infrastructure, where it rose 1.6 points since last year to score 64.1. 

Online connectivity was a key driver behind Edinburgh’s strong performance, with the Index citing the Scottish capital’s three-year Digital and Smart city strategy, which promises to expand digital access across Edinburgh and elevate digital skills among its residents.

Glasgow, meanwhile, has risen two places to seventh in the latest Index, achieving a score of 44.9 – an increase of 3.4 points from the previous edition. 

The city now holds the seventh-highest growth potential score in the UK, largely thanks to an impressive 19.1% growth in GVA over the last five years, with the report citing steady progress in both infrastructure and skills, reinforcing the city’s reputation as a “dynamic and adaptable” destination for foreign investment.

“Edinburgh’s robust infrastructure and highly-skilled workforce, alongside Glasgow’s dynamic growth and improving infrastructure, make Scotland a standout destination for investment,” said Fraser Gillies, managing partner at Wright, Johnston & Mackenzie.

“With a continued focus on delivery, policy stability, and effective local governance, I am confident that both cities will remain at the forefront of global investment destinations for years to come.”

However, the rest of Scotland struggled to keep pace, with Aberdeen the only other Scottish city making the top 48, coming in at eighteenth with a score of 36.0. That put it behind faster-growing and more attractive regional areas like Birmingham and Liverpool.

Overall, the report highlights a troubling decline in FDI over the last few years, with projects from investors entering the UK market for the first time falling from 711 in 2022/23 to 553 in 2024/25 – a drop of more than 22%.  

FDI projects from existing investors have also taken a hit, falling from 944 in 2023/24 to 822 in 2024/25 – a 13% drop that signals waning confidence against a backdrop of sluggish UK economic growth and elevated borrowing costs, challenges felt around the globe.

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To tackle this, the report sets out a series of policy recommendations, including spreading London’s advantages across the UK through infrastructure and devolved investment tools,  ensuring Industrial Strategy Zones deliver real outcomes, and prioritising stability and trade relationships to maintain the UK’s competitiveness.

“Our research shows that the UK’s FDI landscape has strengthened on the back of a modestly improved economic outlook compared with this time last year, despite ongoing domestic and global headwinds,” said Pushpin Singh, senior economist at Cebr.

“However, the recovery remains uneven: while some cities are seeing renewed growth, with the capital once again leading the way, others continue to lag. Converting this relative improvement into a sustained, nationwide upswing will require further targeted action to close these gaps.”