You are here
UK productivity likely rose again in Q2: ONS
[LONDON] Productivity, arguably the Achilles heel of Britain's economy since the global financial crisis, appears to have risen for a second quarter in a row during the three months to June, the Office for National Statistics said on Wednesday.
Higher productivity - or output per hour worked - is the key to rising living standards in advanced economies over the long term but it has risen far more slowly than expected in Britain since the financial crisis, contributing to weak wage growth.
Output per hour worked rose 0.5 per cent in the three months to June compared with the January-March period, when it also rose 0.5 per cent, the ONS said, basing its estimate on preliminary economic growth data and labour market figures.
Productivity by this measure has risen on average by 0.1 per cent per quarter since Britain exited recession in 2009, compared with 0.6 per cent between 1971 and 2008.
Economic growth in recent years has been accompanied by a big increase in the number of people employed, suggesting the expansion has been achieved by more people working longer hours, rather than more efficiently.
Economists do not expect to see a sharp improvement any time soon.
The Bank of England this month reduced its forecasts for productivity growth after June's vote to leave the European Union. It expects output per hour will expand by 0.75 per cent in 2016, lower than its earlier prediction of 1.25 per cent.
The ONS estimated that output per worker - a different measure of productivity - inched up by 0.1 per cent in the second quarter, slowing from a 0.5 per cent increase in the first three months of the year.
The figures will be updated in October, the ONS said.