The scandal, which revealed how gangs of mostly Pakistani men had groomed, trafficked and raped young white girls more than a decade ago, returned to the political agenda this year after US billionaire Elon Musk criticised the British government.
Interior minister Yvette Cooper in January asked Louise Casey, a former senior official, to undertake a "rapid audit" of the scale and nature of gang-based exploitation in Britain.
Casey's report is expected to say that vulnerable white British girls were "institutionally ignored" by police and local authorities fearing being accused of racism, Sky News reported on Saturday.
"(Casey's) position when she started the audit was that there was not a real need for a national inquiry, over and above what was going on," Starmer told reporters en route to the G7 summit in Canada on Saturday.
"She has come to the view that there should be a national inquiry on the basis of what she has seen. I have read every single word of her report and I am going to accept her recommendation," he added.
The Conservative Party leader Kemi Badenoch said Starmer had to be led by the nose to make what she said was the correct decision.
"I've been repeatedly calling for a full national inquiry since January," she said.
"Many survivors of the grooming gangs will be relieved that this is finally happening. But they need a resolution soon, not in 10 years' time."
