ENGLISH PREMIER League clubs’ spending on new players dropped by 10 per cent to £450 million over the summer, with a big drop in investment in foreign players.

Even Manchester City’s €136 million spree failed to see the top flight match the record sum of €568 million spent a year ago.

Football finance experts believe the high rate of the euro and 50 per cent tax rate for very high-earners has contributed to the drop.

Paul Rawnsley, director of Deloitte’s Sports Business Group, said the figures were no surprise – and net spending has dropped from €227 million to €91 million as clubs such as Manchester United, Arsenal and Liverpool resisted spending all their earnings from transfer income from Cristiano Ronaldo, Emmanuel Adebayor and Xabi Alonso.

Rawnsley said: “There are a number of contributory factors – the exchange rate, the tax regime in Spain being more favourable to players and clubs, and perhaps clubs thinking there is less risk in buying established Premier League players than from overseas.”

Rawnsley does not expect the picture to alter next year either even if, as expected, the top flight benefits from a big rise in the value of overseas TV rights.

Rawnsley said the necessity of the owners of Manchester United and Liverpool to make big interest payments on loans taken out to buy the club have also impacted.

“Some clubs may well have felt that thanks to the spending of Real Madrid and others such as Manchester City the transfer market has been too inflated.”