The UK attracted the most foreign investment in Europe last year and inward investment rose by 14 per cent, according to figures out today.

Investment and expansion projects by overseas companies created more than 25,000 jobs in 2003/4, with the number of projects rising from 709 to 811.

Almost one third of the projects were in manufacturing. Other sectors with growing investment included IT, software, electronics and biotechnology/pharmaceuticals.

Trade and Industry Secretary Patricia Hewitt said the figures show the UK is a great place to do business.

"Our competitive advantage comes from the economic stability built by the Government, the skill of our workers and our strong IT and telecoms infrastructure," she said.

"Whether in manufacturing, services or the sciences the way to compete in the global marketplace is to keep improving people's education and skills. We should not fear the growth of other economies or seek to compete with low wage economies for low wage work."

The figures were published by UK Trade and Investment, the government's trade and inward investment operation. They are supported by figures published by consultants Ernst and Young in May 2004, which also show that:

• The UK remains the top investment location in Europe
  
• The UK is the top European investment location for research, development, headquarters operations, software, electronics, pharmaceuticals, financial services and telecommunications, including call centres
  
• It has also increased its market share - the UK won 23 per cent of investment into Europe in 2003, compared to 19 percent in 2002
  
• International investment projects into Europe rose by two per cent in 2003, halting the decline seen since investment last peaked in 2000