The UK economy would need investment of £1trn pounds over a decade for an annual growth rate of 3% to be achieved, according to a business lobby group.

The Capital Markets Industry Taskforce (CMIT), which represents leaders in the financial services sphere, said £100bn a year must be found to help the country catch up after trailing its peers for many years.

It urged a focus on energy, housing and venture capital, arguing the money could be unlocked from the £6trn in long-term capital within the pensions and insurance sector.

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The government has made growing the economy is top priority.

Prime Minister Sir Keir Starmer let it be known during the election campaign that he was seeking to achieve a growth rate of 2.5% – a level the economy has struggled to reach since the financial crisis of 2008.

Labour has since claimed its task has been made harder by a £22bn “black hole” in the public finances left behind by the Conservatives, forcing it to make “tough choices” ahead in the looming budget next month that are expected to target those with the broadest shoulders, including wealth creators.

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The report suggested that UK pensions could double their allocations to domestic and unlisted equities and still be in line with the pensions industry in other advanced markets.

It added that the government, which is reviewing the pension system’s ability to help fund corporate start-ups, should also look at incentives to investment, such as reductions in taxes on shares for retail investors.

They have faced steep criticism in the City amid efforts to bolster interest in UK stock markets which have lagged growth rates witnessed on the continent and in the United States.

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The report’s lead author Nigel Wilson, the former boss of Legal & General, told the Reuters news agency: “We’ve underinvested in the UK for such a long time, there’s a massive gap between the other G7 countries and ourselves.

“We have the long-term capital in the UK, it needs to be reallocated.”

The study called for an extra £50bn annually in energy investment to help drive power security and meet net zero targets.

It sought £30bn for housing and £20bn-£30bn in venture capital.

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