Should the United Kingdom Be Worried About Productivity Data?
Productivity data from the United Kingdom may reveal an underlying weakness in the country’s economy, the Wall Street Journal reports. On the surface, productivity measures from the U.K. have looked up, rising by 0.5 percent in the second quarter of this year according to data released late last month.
This was the first rise since 2011, causing some to herald the increase as just one more good sign for the country’s economy. Building on positive data from the service and manufacturing sectors, as well as unemployment data, some have gone so far as to say that the U.K. is on the road to recovery.
However, looking at where the U.K. stands in comparison to the rest of the developed world paints a different picture of the data. Productivity in the U.K. remains 16 percentage points below the average value of the G7 nations, approximately double what the gap was a decade ago. Looking at the difference between the U.K. and the United States reveals an even bigger discrepancy, with Britain lagging behind by a rate of 29 percent.