(Bloomberg) -- Bank of England rate-setter Catherine Mann said that Britain’s lagging investment levels are a “concern” and that the economy is heavily reliant on a small pool of large companies and finance giants to bring in money.

Mann said that just 0.5% of UK firms account for half of business investment, which she said has “underperformed” when compared with other countries.

“UK financiers are concentrated, they are institutional, and they’re foreign,“ Mann said Tuesday at a panel event at the National Institute of Economic and Social Research in London. She said that just three large institutional investors are the key owners of a large number of UK businesses. 

Mann was laying out evidence at an event looking into why Britain has suffered one of the worst productivity performances in the developed world.

Low business investment has been blamed for the UK’s productivity woes, with Brexit seen as worsening the problem and companies shunning listing on London’s stock market.

To be sure, business investment has picked up since the pandemic, boosted by generous tax breaks, and Britain fares better when it comes to attracting foreign direct investment — points made by those who supported Britain leaving the European Union.

The country remains to top investment destination after the US, pulling in the the second-most greenfield FDI in each of the three years to 2022, trumping even China, according to the Financial Times’s fDi database. 

Paul Fisher, a former BOE policymaker, said at the same event that the UK’s productivity problems pre-date the global financial crisis and could soon be mirrored in other developed countries.

He said the developed world’s productivity slowdown is a “long-term trend that is going to carry on” and can be largely blamed on a shift from manufacturing to services in the industalized world. As manufacturing — which typically has higher productivity growth rates than services — fades as a source of output in developed economies, their productivity growth fizzles out, he said.

He said that the UK’s productivity woes could mean it is just ahead of other countries in this process. 

--With assistance from Andrew Atkinson.

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