Financial inflows inflate the exchange rate and create other local price distortions (property) so that alternative export sectors find it harder to compete internationally. A range of influential commentators from Paul Krugman to Mervyn King and Ashoka Mody (formerly of the IMF) have identified this as being prevalent in the UK. See also this, from Roger Bootle and John Mills.

This theme will be further fleshed out, including here.