UK “only advanced economy to see productivity slump”
The UK’s productivity will decline this year, making it the only advanced economy in the world to see a slow-down.
This is according to new figures from US research group the Conference Board, which suggest that Britain is seeing a productivity crisis more severe than in any other comparable world economy.
Productivity has been a watchword for economists since the 2008 financial crash, with economists warning that sluggish productivity growth measured since could spell wider problems.
But the Conference Board figures now suggest that productivity is actually declining in the UK, once a wider measure of economic efficiency is used.
Mark Carney, governor of the Bank of England, believes that that decline can be attributed to Brexit.
Speaking to the Financial Times, Mr Carney said: “What has happened in the UK in the corporate sector has been a stall in business investment since the referendum. It is starting to feed through to the productivity statistics.
“Despite the fact that balance sheets are clean, the economy has no spare capacity, monetary policy is accommodative, the labour market is incredibly tight – everything says invest, invest, invest, but there’s extreme uncertainty.”