An annual growth rate of 3% would require extra investment of £100 billion a year in the next 10 years, particularly in energy, housing and venture capital, according to the report from Capital Markets Industry Taskforce
Britain needs an additional £1 trillion in investment in the next decade to grow the economy, a report said on Friday.
New British Prime Minister Keir Starmer said he wanted the economy to achieve annual growth of 2.5% when campaigning in the run-up to July 4’s election – a rate that Britain has not regularly reached since before the 2008 financial crisis.
An annual growth rate of 3% would require extra investment of £100 billion a year in the next 10 years, particularly in energy, housing and venture capital, as per the report from UK financial services lobby group Capital Markets Industry Taskforce.
The investment could come out of the £6 trillion in long-term capital in Britain’s pensions and insurance sector, the report’s lead author Nigel Wilson, former boss of Legal & General, told Reuters.
We have underinvested in the UK for such a long time, there is a massive gap between the other G7 countries and ourselves, he said.
We have the long-term capital in the UK, it needs to be reallocated, he added.
The British economy needs an extra £50 billion annually in energy investment, as it seeks to meet net zero targets, £30 billion in housing and £20-30 billion in venture capital, the report said.
The government should look at incentives to investment, such as reductions in taxes on shares for retail investors, the report said.
UK pensions have a “significantly lower” allocation to domestic and unlisted equities than most developed market pension systems globally, as per a separate report published on Friday by think tank New Financial.
UK pensions could as much as double their allocations and still be in line with the pensions industry in other advanced markets, the report added.