By Dipankar De Sarkar, London, October 1, 2008 (IANS)

Despite a slowing global economy, Britain was the top destination in Europe and number two in the world for inward investment last year, attracting more than a trillion dollars, a UN report says. And India placed number six - just ahead of China - in the list of investors in Britain. India and China currently account for less than one percent each of the total FDI stock held in Britain.

Britain, which attracted and retained $1.347 trillion worth of investment stock, was second only the United States as an investment destination in 2007, says the World Investment Report of the UN Conference on Trade and Development (Unctad) published last week.

The report says this was the second year in a row that Britain broke the trillion-dollar threshold, prompting Trade and Investment Minister Digby Jones to hail "these excellent figures."

"This year, the expectation is that the worldwide slowdown, including the twin global shocks of the credit crunch and rising energy and food prices, will make it more difficult for every economy to attract investment," Jones said Tuesday. "However, the 2007 figures are recognition of the fact that overseas businesses investing abroad find the UK an ideal destination."

India and China currently account for less than one percent each of the total FDI stock held in Britain. But taking a different yardstick - that of 'project measures' - the report says the India placed number six in the new investments flowing into Britain last year, after the US, France, Germany, Australia and Japan. China was number seven.

"In time, Indian investments will begin to have an impact on the overall stock level in Britain," an economist at UK Trade and Investment (UKTI), the government's trade international business body, told IANS.

In 2007, the flow of inward FDI into Britain was $223 billion, an increase from the 2006 figure of $148 billion, much of it accounted for by merger and acquisitions activity in the middle of the year.