British companies are investing less in their domestic economy than almost any of their G7 counterparts, reinforcing long-standing concerns about productivity and growth as rising energy costs add fresh pressure on industry.
Analysis from Institute for Public Policy Research (IPPR) shows that private sector investment in the UK amounted to just 11.1 per cent of GDP in 2023, the second-lowest level in the G7, ahead only of Canada at 10.8 per cent.
By comparison, Japan leads the group with investment equivalent to 18.2 per cent of GDP, followed by France at 12.6 per cent and Germany at 11.9 per cent, highlighting the scale of the UK’s relative underperformance.
The findings underline a persistent structural issue. The UK has consistently ranked near the bottom of the G7 for business investment since the global financial crisis, and has remained below the group average every year since 2001.
According to the IPPR, this chronic underinvestment has constrained productivity growth for years, limiting the ability of businesses to expand capacity, adopt new technologies and improve efficiency.
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