There was an interesting article in City AM today reflecting on our post-Brexit world and the Bank of England's likely interest-rate cut to come. The author, Annabelle Williams quite rightly pointed out that the real elephant in the room is our lack of productivity. In simple terms, that is the amount we produce per per person.
Britain's output per hour worked is 18 percentage points below the average for the G7 nations, and it is not getting better anytime soon. Since the 2008-9 recession, productivity in the UK has stagnated badly. We are not working smarter. Our economy has only grown in the post-recession period due to working more hours. According to the office of national statistics this post-recession trend is unprecedented in the UK.
In his Mansion House address in 2015, former Chancellor George Osborne explained the problem as follows:
"We don’t export enough; we don’t train enough; we don’t save enough; we don’t invest enough; we don’t manufacture enough; we certainly don’t build enough, and far too much of the economic activity in our nation is concentrated here in the centre of London".
The Chartered Institute of Personnel and Development (CIPD) has not surprisingly, blamed our productivity challenge on problems of poor leadership, management and a lack of investment in training and education.
So not much to fix then. There will clearly be no easy answers to the problem. But finding solutions is vital to the health of our economy and ability to secure real improvements in wages and living standards.
See the link below for the CIPD's view on the problem...
Here is today's City AM article.