{"slug": "uk-productivity-showing-sustained-improvement-economists", "title": "UK productivity showing sustained improvement: economists", "summary": "Britain's economic productivity is showing sustained improvement, with annual growth in output per hour averaging 1.1% over the two years to end-June 2026, up from a 0.7% decline in the previous two years, according to the Resolution Foundation think tank. Economists debate the role of AI in the pickup, with Morgan Stanley's Bruna Skarica estimating private-sector productivity growth at 1.8% a year, while Pantheon Macroeconomics' Robert Wood notes few British businesses report AI reducing staffing needs.", "body_md": "# UK productivity showing sustained improvement: economists\n\nThe extent to which the pickup is driven by AI is subject to debate\n\n[LONDON] Britain’s economic productivity is starting to show signs of sustained improvement, economists said on Monday (Aug 24), potentially marking the end of a prolonged slump that began around the 2008 financial crisis and appeared to worsen after the Covid-19 pandemic.\n\nRising productivity — or the amount of economic output generated per hour worked — is key to higher living standards and offsetting some of the fiscal headwinds from Britain’s ageing population and growing defence spending.\n\nEstimates from the Resolution Foundation think tank, published on Monday, showed that annual growth in output per hour had risen to an average of 1.1 per cent over the two years to the end of June 2026, up from an annual decline of 0.7 per cent in the two previous years and an average rise of 0.7 per cent in the late 2010s.\n\n“While official figures suggest that the output of workers has worsened further in the mid-2020s, our more accurate productivity measure suggests that it has been improving in recent years,” said Simon Pittaway, an economist with the Resolution Foundation.\n\nSurvey problems makes UK productivity hard to measure\n\nUntil recently, the Office for National Statistics’ main productivity measure was based on a workers’ survey that suffered from a big fall in response rates after the pandemic.\n\nIn June, it instead recommended using tax data, which gives more reliable employee numbers but lacks detail on hours worked and self-employment.\n\nEconomists, meanwhile, have come up with their own estimates of productivity growth.\n\nBruna Skarica, chief UK economist at Morgan Stanley, believes private-sector productivity growth has risen to 1.8 per cent a year — close to the pace seen before the global financial crisis.\n\n“We are seeing similar trends as we saw in the US,” she said, but added that the US improvement began roughly a year earlier than Britain’s.\n\nIn the United States, productivity growth picked up after the pandemic and has been strong for about three years.\n\nSimilarities between the British and US economies, including a high reliance on services that might benefit from artificial intelligence, mean Skarica expects the improvement to persist in Britain too, similar to what happened in the 1990s when computers came into widespread use in offices.\n\nThe extent to which the pickup is driven by AI is a subject of debate.\n\nRobert Wood, chief UK economist at Pantheon Macroeconomics, said that, so far, few British businesses said AI had reduced staffing needs apart from in a few job roles such as junior software developers, raising questions about whether the productivity gains would last.\n\nThe Resolution Foundation said the improvement in productivity was broad-based and that it was easier to rule out some possible causes — such as reduced employment in less productive sectors like hospitality and retail due to a higher minimum wage — than to find a single clear driver.\n\n“The UK’s productivity recovery has been achieved by the same workers, doing the same jobs, and working in the same sectors,” Pittaway said. REUTERS\n\nDecoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.\n\nShare with us your feedback on BT's products and services\n\n[TRENDING NOW](/pulse?ref=trending-now)\n\nWhen every phone becomes a satellite phone, what happens to Asia’s telcos?\n\nBessent’s bond manoeuvres giving global debasement trade new life\n\nLaos-China Railway picks up steam, but S-E Asian country struggles to capture gains\n\nToo little, too late? Manila’s billion-dollar bid to ignite its sputtering EV industry", "url": "https://wpnews.pro/news/uk-productivity-showing-sustained-improvement-economists", "canonical_source": "https://www.businesstimes.com.sg/international/uk-productivity-showing-sustained-improvement-economists", "published_at": "2026-08-24 01:46:33+00:00", "updated_at": "2026-08-24 02:13:33.464556+00:00", "lang": "en", "topics": ["artificial-intelligence"], "entities": ["Resolution Foundation", "Simon Pittaway", "Office for National Statistics", "Bruna Skarica", "Morgan Stanley", "Robert Wood", "Pantheon Macroeconomics"], "alternates": {"html": "https://wpnews.pro/news/uk-productivity-showing-sustained-improvement-economists", "markdown": "https://wpnews.pro/news/uk-productivity-showing-sustained-improvement-economists.md", "text": "https://wpnews.pro/news/uk-productivity-showing-sustained-improvement-economists.txt", "jsonld": "https://wpnews.pro/news/uk-productivity-showing-sustained-improvement-economists.jsonld"}}