‘UK can triple GDP growth by attracting private finance’
A LEADING investment firm has called on the UK to spark new private capital investment and address a “financing gap” to accelerate growth in the economy.
A report by Lakestar, which provides capital for technology companies such as fintech giant Revolut, said the Government could triple GDP growth by attracting £75billion of extra investment each year.
The report has called for a total of £1.5trillion of funding aimed at sectors of strategic significance, including decarbonisation, biotech and space over the next two decades.
It argued that attracting a cash injection like this would create up to £7trillion more value in the economy and more than three million jobs.
The call comes as GDP is expected to decline later this year amid fears the impact of soaring inflation could result in a recession.
The UK Financing Gap Report added that traditional banks are held back by regulation that stops them unlocking more capital investment at scale, and said pension funds could be key to accessing more investment capital.
“The UK has a vibrant startup ecosystem already,” said Klaus Hommels, founder and chief executive of Lakestar. “With world-class institutions, and incredible entrepreneurs, the next phase of growth can be achieved with an ambitious strategy for scaling the companies of the future.
“Scaling up growth companies over the next two decades would help the UK win in battleground sectors and retain digital sovereignty.”
Sam Gyimah, venture partner at Lakestar and former minister for universities, science and innovation, said: “Solving the UK financing gap would put a rocket under GDP growth and usher in a new generation of globally competitive British businesses. “High growth businesses are the backbone of a successful economy,” he added. “Scaling investment in new industries could create value similar to the US over the last 20 years.”