LONDON, April 30 (Reuters) - Foreign investment in Britain's financial and professional services halved to one billion pounds ($1.25 billion) in 2023, the City of London said on Tuesday, though the UK remains a top global destination.

The sector is facing tough competition in capital markets, particularly for listings from New York and, since Brexit, EU financial centres such as Paris and Amsterdam.

About 7,000 jobs also left the UK for new post-Brexit hubs opened in the European Union by banks, insurers and asset managers to avoid disruption from Britain's departure from the bloc.

The one billion pounds in 2023 was half of the "exceptional" two billion pounds of inward investment in the sector in 2022 as a tougher economic backdrop hit sentiment, according to the City of London, which administers Britain's main financial centre.

The United States was the largest source of cash, accounting for more than 40% in 2023, for a total of 222 projects that created nearly 7,000 jobs.

Investment management firms emerged as the primary drivers of inward investment projects, comprising a third of all investments last year, or 227 million pounds, the City said.

City of London policy chair Chris Hayward said a more strategic approach is needed to increase inward investment.

"This starts with creating a hub to showcase our offer to the world, alongside a strong financial services strategy," Hayward said in a statement.

($1 = 0.7989 pounds)

(Reporting by Huw Jones; Editing by Kirsten Donovan)

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