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UK productivity pickup challenges prior narrative on Reeves’ forecasts
The new LSE-linked assessment says productivity has risen meaningfully since mid-2024, with annual growth around 1.6%, versus about 0.3% in the prior decade.
The Guardian reports that a new assessment of UK productivity suggests the country’s economic strength may have been systematically underestimated, raising questions about whether earlier projections that informed policy decisions were undermined by ONS data.
According to the piece, instead of stagnation the report points to a “meaningful pickup” in productivity since mid-2024, with annual productivity growth of about 1.6%, compared with an average of 0.3% over the previous decade.
The story also ties the productivity debate to UK fiscal planning, noting that Rachel Reeves previously had to respond to an Office for Budget Responsibility downgrade to productivity forecasts, from 1.3% annual growth to 1%, which the article says had knock-on effects for the public finances.
It adds that UK GDP still showed growth of 0.4% in the second quarter, and it frames the renewed productivity estimates as relevant to the budget headroom Reeves sought under fiscal rules.