Britain is caught in a growth “doom loop” owing to decades of weak private sector investment dragging down the country’s economy, a leading think tank has said.

The UK fell to the bottom of the G7 league table for business investment in 2019 and a new report by the Institute for Public Policy Research (IPPR) found Britain has fallen further behind since the pandemic.

The slump means Britain’s economy has missed out on £350bn of investment between 2005 and 2021, compared to if the UK had remained the median country in the G7 for private sector investment.

The IPPR’s George Dibb said: “Currently, the UK is experiencing a debilitating case of investment-phobia, and the government’s aversion to investing to seize future opportunities is stopping us from getting out of the growth doom loop we find ourselves in.

“If the economy is the engine of a country, investment is its fuel. But the UK’s tank is running on empty and it’s harming economic growth, driving inequality, and slowing progress towards net zero and energy security.”

As well as ranking last among the G7, the IPPR report also found that the UK now ranks twenty-seventh out of the 30 OECD countries for business investment. Britain is now worse for investment than every other developed economy apart from Poland, Luxembourg, and Greece.

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