TLDR:
- The UK needs £1 trillion in investments over the next decade to boost economic growth, according to a new report.
- To achieve this, the UK needs annual investments in energy, housing, and venture capital.
In a new report, it is highlighted that the UK requires an additional £1 trillion in investments over the next ten years to kickstart economic growth. This comes as British Prime Minister Keir Starmer aims for a 2.5% annual growth rate, which has not been consistently achieved since before the 2008 financial crisis. To push for even more ambitious growth of 3%, an additional £100 billion per year would be needed. The report suggests annual investments of £50 billion in energy to meet net zero goals, £30 billion in housing, and £20-30 billion in venture capital.
Nigel Wilson, former CEO of Legal & General, proposes reallocating some of the £6 trillion held in the UK’s pensions and insurance sector to meet these investment needs. However, historical underinvestment has left the UK lagging behind other G7 nations in terms of economic vitality. The report recommends the government introduce incentives such as reducing taxes on shares for retail investors to stimulate more investment.
In terms of the market impact, the report emphasizes the urgency to mobilize the vast £6 trillion in long-term capital within Britain’s pensions and insurance sectors to drive investments in key growth sectors. This shift is critical given the current underinvestment trends and ongoing government reviews focused on boosting UK pensions’ investment in domestic startups. Closing the investment gap compared to other G7 countries is essential for the UK to accelerate investment in crucial sectors and foster growth. The proposed £1 trillion investment over the next decade aims to bridge this gap and keep the UK competitive on a global scale.
