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Figures show UK investment levels are worst in the world G7 Should “sound the alarm” No. 10say critics.
The latest figures show the UK ranks bottom, behind the US, France, Germany, Italy, Japan and Canada, with public and private investment accounting for just 18.6% of GDP in the three months to September.
Business groups warn that things could get worse after April too, when a series of changes are announced exist Rachel Reeves The budget comes into force, including changes to business rates and a rise in the living wage.
In response, a Labor MP accused the chancellor of “breaking promises” and thereby driving down business investment.
Citing data from the Organization for Economic Co-operation and Development, the Office for National Statistics said that among the G7 countries, Japan has the highest level of investment at 27%, followed by Italy and Canada at 23%, France at 22%, the United States at 21% and Germany at 20%.
The Labor government has pledged billions of pounds worth of government investment over the next four years in projects from transport to housebuilding as it strives to ensure economic growth.
But data suggests the hoped-for big boost in private investment did not accompany the announcements.
Economists at PwC said public investment would rise by £13 billion in 2026-27, the biggest two-year increase since the 2008 financial crisis. However, PwC chief economist Barrett Cooperlian said private investment “will be stalled by weak business confidence and slower profit growth”.
Labor MP Graham Stringer pressed the chancellor on the figures, telling The Times: “No economy can succeed when energy costs for business and industry are among the highest in the developed world.
“Everything else is secondary until the Chancellor deals with energy, but the uncertainty she has created around family businesses and the breach of tax promises has made businesses reluctant to invest.”
gentlemen Mel SteadThe shadow chancellor said “being at the bottom of the list for investment in the G7 should be a wake-up call for Downing Street”.
Shadow treasurer James Wild posted on X that ordinary people would “suffer” because the prime minister has “no plan and no spine”.
Reform’s Richard Tice said wealth creators were being driven away, pointing to pharmaceutical giant Merck’s scrapped plans to build a £1bn research center in the UK.
Meanwhile, Federation of Small Business executive director Craig Beaumont said business sentiment was now “closer to frustration than confidence”.
“Investment and growth are under increasing pressure in 2026. Small business costs will rise sharply across the board in April: energy fixed charges will rise, employment costs will rise and business rates bills will rise,” he said.
“To keep more businesses viable and unlock confidence, investment and growth, the government must have answers in its spring forecast.”
In response, the government said: “Unlike previous governments, we are investing in our economic future, with more than £120 billion in capital investment compared to the previous plan, the highest level of public investment in 40 years.”
“We have also changed the fiscal rules so that we can prioritize investment alongside the private sector. As a result, the National Wealth Fund has invested almost £4 billion, leveraging more than £5 billion of private investment, creating almost 12,000 new jobs and helping to improve living standards across the country.”