Productivity has gone into reverse since 2007, and the gap with the US and Germany is now as big as it was two decades ago
Larry Elliott: Productivity is a key measure of how well an economy is doing.
Put simply, it measures how effective a nation is at making stuff and
providing services.Looking back over the decades, it has tended
to increase by a bit more than 2% a year in the UK as more skilled
workers use better-quality kit to provide the new products that come on
the market.
In the five years since the start of the financial
crisis in 2007, Britain's productivity growth has not just stalled but
gone into reverse. Had the pre-recession trend continued, output per
hour would have been 13% higher than it was when the markets froze up;
in reality, it was 2% lower.
The recession was global, so the UK is not alone in suffering a productivity hit. The impact was, however, more severe in Britain than elsewhere, which is why the latest international comparisons show a drop down the league table.
One way of looking at the official data is to conclude it marks a return to the days when Britain's relatively poor productivity record saw it dubbed the sick man of Europe. There was a marked improvement in the 1990s and the first half of the 2000s, but this came to an end in 2007. Now the gap with the US, Germany and France is as big as it was two decades ago.
Larry Elliott: Productivity is a key measure of how well an economy is doing.
Put simply, it measures how effective a nation is at making stuff and
providing services.Looking back over the decades, it has tended
to increase by a bit more than 2% a year in the UK as more skilled
workers use better-quality kit to provide the new products that come on
the market.
In the five years since the start of the financial
crisis in 2007, Britain's productivity growth has not just stalled but
gone into reverse. Had the pre-recession trend continued, output per
hour would have been 13% higher than it was when the markets froze up;
in reality, it was 2% lower.The recession was global, so the UK is not alone in suffering a productivity hit. The impact was, however, more severe in Britain than elsewhere, which is why the latest international comparisons show a drop down the league table.
One way of looking at the official data is to conclude it marks a return to the days when Britain's relatively poor productivity record saw it dubbed the sick man of Europe. There was a marked improvement in the 1990s and the first half of the 2000s, but this came to an end in 2007. Now the gap with the US, Germany and France is as big as it was two decades ago.
