UK Productivity Gap Widens to Record Low

Britain’s poor productivity record has been highlighted by government figures showing the biggest gap with other leading western economies since modern records began in the early 1990s.

Output per hour worked in the UK was 18 percentage points below the average for the remaining six members of the G7 group of industrial nations in 2014, the Office for National Statistics said.

The gap – up one percentage point on the previous year – was the widest since 1991 and showed a particularly marked deterioration since the onset of the financial crisis and deep recession of 2007-09. The shortfall was slightly smaller than the 20-point gap reported in the ONS’s preliminary estimates released in September 2015.

In the first half of the 2000s, the UK narrowed its productivity gap with the rest of the G7 to just 4 percentage points but the period since has seen that trend go into reverse.

The ONS’s final international estimates of productivity in 2014 found that output per hour in the UK was now 36 percentage points behind that in Germany – the biggest gap ever recorded with a fellow G7 country and up two points on 2013.

Britain had a 30-point productivity shortfall with the US in 2014 – up three points on the previous year – and an unchanged 31-point gap with France. Only Japan of the G7 countries had a worse productivity record, the ONS said.

via SOURCE

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza