LSE Says UK Productivity Rose 1.6% Since Mid-2024 as Jobs Data May Be Flawed
Updated
Updated · The Guardian · Aug 16
LSE Says UK Productivity Rose 1.6% Since Mid-2024 as Jobs Data May Be Flawed
1 articles · Updated · The Guardian · Aug 16
Summary
Annual UK productivity growth has likely run at about 1.6% since mid-2024, not near-stagnation, according to a new London School of Economics assessment.
The revision hinges on employment data: the Labour Force Survey shows 377,000 more employees since mid-2024, while a tax-based PAYE measure used by the study shows a 133,000 decline.
That gap matters because fewer workers producing similar output implies stronger productivity, potentially undermining the Office for Budget Responsibility’s earlier downgrade from 1.3% to 1% productivity growth.
Rachel Reeves had to rebuild fiscal headroom after that downgrade darkened the outlook for growth, tax revenues and the deficit, though the study says it is still too early to know if the pickup will last.
The findings also sharpen pressure on the Office for National Statistics, which lost accreditation for its labour survey in 2024 and does not expect a replacement to be ready before November 2027.