Tuesday 05 May 2026 5:04 am  |  Updated:  Monday 04 May 2026 3:32 pm

Britain’s £800bn investment pile that isn’t being used

By: Andrew Allum

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Britain’s ‘mainstream investors’ hold more than £800bn in net financial wealth, an investment sum large enough to meaningfully address the capital gap, writes Andrew Allum

Compounding is taught in GCSE maths, but not its financial implications. Players of Civilization 4 would be familiar with apocryphal Einstein quote “compound interest is the most powerful force in the universe”. However, the power of compounding in economics depends on the rate.

In the 1980s and 1990s, labour productivity (GDP per hour worked) grew so fast that it doubled in a generation (2.5 per cent growth, compounded for 28 years). Generation X therefore earned roughly twice what their parents had earned in real terms. Many things worked well as a result.

Since 2000 this has slowed down, to an average of 0.9 per cent growth per year. At this rate it takes 79 years to double. In this context, many have lost faith in economic growth and politics has taken an ugly turn towards envy.

As a result of this slowdown, we have slipped down international rankings. Using GDP per hour worked in PPP terms, we are 46 per cent below Norway’s productivity and 15 per cent or more below Germany, Netherlands, US and a dozen other........

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