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.