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UK productivity rising faster than official data, thinktank says
The Resolution Foundation argues the rebound is broad based and is not explained by job cuts from hospitality and retail or an early AI boom.
The Resolution Foundation says UK productivity is improving faster than official statistics indicate, arguing that the chancellor John Healey may have inherited an economy beginning to emerge from the long shadow of the 2008 global financial crisis.
In its analysis, the thinktank frames productivity as a key driver of growth because it measures economic output per worker. It also says the government’s recent productivity picture should be reconsidered by using what it describes as a more accurate snapshot of the workforce than the widely criticized labour force survey.
The report disputes explanations that the uptick is mostly driven by job losses in lower productivity sectors such as hospitality and retail. It points out that hospitality’s share of employment is no lower than in the late 2010s, and it is only slightly below its post-pandemic peak.
The Resolution Foundation also rejects the view that the gains can be attributed only to an early AI boom. It argues instead that the productivity recovery has been achieved by the same workers, doing the same jobs, and working in the same sectors, while noting that other recent reporting has offered a more optimistic outlook for the UK economy.