LONDON (Reuters) - Britain faces a decade of major public policy challenges that could reduce economic performance to nearer that of struggling Italy than Germany, Europe’s powerhouse, a think-tank said on Tuesday. The Resolution Foundation said Britain had to address problems linked to Brexit on top of those faced by other countries including the impact of COVID-19, the transition to a net-zero carbon economy, an ageing population and technological change. Without proper plans, Britain risked failing to address the slowest productivity growth for over 120 years in the past decade and higher inequality than any country in the European Union except Bulgaria, it said. “The UK’s recent record of weak productivity, stagnant living standards and high inequality makes a new economic approach desirable,” Clive Cowdrey, founder of the Resolution Foundation, said. “What makes a new approach essential is the scale of coming change.” Prime Minister Boris Johnson has promised to “level up” Britain’s economy by targeting investment and jobs to areas that lag behind London and areas around the capital. He also talks of a “Global Britain” after its exit from the European Union. But the Resolution Foundation said Britain lacked a plan to achieve these goals over the next decade and that the country risked squandering economic strengths such as high levels of employment, which were now at risk from increased automation. As it launched an inquiry jointly with the Centre for Economic Performance at the London School of Economics, the Resolution Foundation said Italy had seen no growth in gross domestic product per capita over the past two decades while Britain recently fell further behind Germany. “If the UK’s pace of underperformance relative to Germany continues at the same pace in the 2020s, then it will end this decade with GDP per capita much closer to that of Italy than Germany,” the think-tank said. The inquiry is being funded by the Nuffield Foundation, a charity that funds research for social policy. Writing by William Schomberg Our Standards: The Thomson Reuters Trust Principles.