Gareth Southgate insists his England team "can go again" as he backed the Three Lions to build on their Euro 2020 final defeat at next year's World Cup.

England lost on penalties to Italy at Wembley on Sunday evening to further extend their 55 years of hurt.

In what was a first appearance in a major final since winning the World Cup in 1966, Southgate saw Marcus Rashford, Jadon Sancho and Bukayo Saka miss their spot-kicks as Italy won the shoot-out 3-2 following a 1-1 draw.

Reaching the final itself will be seen as an achievement and was a step further than a semi-final defeat at the 2018 World Cup in Russia.

Southgate had one of the youngest squads at Euro 2020 – the three players who missed their penalties were 23, 21 and 19 respectively – and he feels the whole squad can play a part in attempting to go one step further and win the World Cup in Qatar next December.

"The younger ones especially, well all of this team, can go again," he said.

"There's no doubt about that, but the young ones are still two, four years from peaking.

"We've got 18, 19, 20 year-olds who have done an incredible job and had a great insight into tournament football and acquitted themselves well throughout.

"There are a huge number of positives from that and those players will be far better for going through so many important wins, so many important landmarks that they've set with historic performances.

"In the main they've performed under huge pressure of being at home for the majority of the tournament, being one of the favourites."

Southgate believes the building blocks of the squad he is hoping to lead to glory in Qatar began in Russia three years ago but knows the recent tournament improvements are not a promise of future success.

"I think Russia was the beginning," he said.

"We had seven in the starting team last night from Russia and that experience has been critical during the big matches in this tournament.

"So to add the young players in at the times we did, the inexperienced players in at the times we did, there is now another group with more learning, more understanding of that high level.

"Because of what they have been through in these two tournaments they will want more, they will know they can get close, they will have belief and that's what we have to build on.

"It doesn't guarantee anything because you have to start again and you have to earn the right every time you take the field and every time you go into a tournament.

"If you want sustained success as a team you have to be constantly evolving, constantly improving, constantly finishing in those latter stages and most teams that win – France went through what we are feeling now in 2016, Germany, Spain went close a couple of times before they won.

"That is normally part of the process that you have to go through. The fact that we've had the first signs of consistency – semi-final, final – that has to be a step in the right direction."

Southgate, speaking the day after the final loss, said he was in need of a rest but will then make sure the rebuild on England's national team which almost culminated in the rain under the Wembley arch continues.

"When my logical brain comes back to life in a few days that is the process we have to go through," he added.

"We have got to keep continuing that and England have to keep that track going; whoever is here, whoever is at the FA, whoever is at St George's Park.

"That's what we have to build, that's the vision at the start and we are showing the signs with the help of the clubs who are producing some fantastic young players.

"All of those things have to align because any part of that football pyramid that isn't strong affects the national team.

"At the moment lots of things are starting to come together and we have to continue that."