UK productivity continues lost decade

LONDON (BBC News): UK workers’ productivity fell again in the final three months of last year, down by 0.1% compared with the same quarter a year ago.

It was the second year-on-year quarterly fall in a row, after a 0.2% drop in the July-to-September period. The ONS said the “productivity puzzle” had been a problem for years.

It said labour productivity was lower over the past decade than at any time in the 20th Century. “It has taken the UK a decade to deliver 2% growth, which historically was achieved in a single year,” said ONS deputy chief economist Richard Heys.

Although it was down compared with the final quarter of 2017, productivity over the final three months of 2018 was 0.3% higher than in the July-to-September period.

Productivity – as measured by the amount of work produced per working hour – is the main driver of long-term economic growth and higher living standards.

However, growth has been sluggish over the past decade as the UK economy has recovered from the downturn triggered by the financial crisis.

The ONS said productivity in the fourth quarter of 2018 was 18.3% below its pre-downturn trend.