Business

UK productivity grows by just 0.5% in 2018 amid Brexit uncertainty

ONS says Britain achieving growth of only a quarter the level seen a decade ago

Britain has maintained its dismal productivity record, with the rise in worker efficiency in 2018 only a quarter of the level seen before the financial crisis a decade ago.

Amid fears Brexit uncertainty is set to further damage productivity growth, holding back improvements in living standards, the Office for National Statistics said labour productivity grew by only 0.5% last year compared to 2017.

The measure of economic output per hour of work previously rose by about 2% a year, on average, before the 2008 financial crisis.

In a damning indication of the weakness of the UK economy, the ONS said it had taken a decade to deliver as much productivity growth as was previously achievable in a single year.

Productivity is considered an important driver of improved living standards over the long term, enabling companies to pay higher wages as they are able to produce higher revenues with the same or fewer resources. The government has made increasing the productivity of British workers a key priority, as part of its industrial strategy.

However, productivity growth has stalled as firms ramp up employment to record levels without being able to sufficiently grow the economy. Growth in efficiency per hour of work dropped by 0.1% in the fourth quarter, compared to the same period a year ago.

Economists are concerned a slump in business investment, caused by Brexit, will hamper future productivity gains.

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