The UK’s productivity rate has returned to its pre-crisis level for the first time, but the country still lags well behind other major economies after years of sluggish growth.
The Office for National Statistics said output per hour increased by 0.6% in the second quarter of this year and had at last recovered the ground lost after the 2008 downturn.
However, underscoring the challenge faced by the chancellor, Philip Hammond, who has vowed to improve Britain’s lacklustre productivity, ONS figures for 2015 showed that the gap between Britain the rest of the G7 group of leading economies remained stubbornly wide. At 18 percentage points in GDP per hour worked terms, the divide was unchanged on the 2014 level and economists warned that pressures on UK businesses from the Brexit process could see the gap widen again over coming years.
UK productivity was 27, 30 and 35 percentage points lower than in France, the US and Germany respectively.
Experts have repeatedly highlighted Britain’s poor productivity performance as a key factor in the squeeze on living standards in the years after the financial crisis. In his speech to the Conservative party conference this week, Hammond said: “If we raised our productivity by just 1% every year, within a decade we would add £250bn to the size of our economy – £9,000 for every household in Britain.”
via The Guardian