Slipping behind

Latest figures from the Office for National Statistics show that the UK economy is becoming less productive, and is slipping behind some of the world's top economies.

The figures measured Gross Domestic Product (GDP), and found that the GDP per worker fell last year in relation to all G7 countries except Germany and Italy last year.

Howard Archer, chief UK and European economist at IHS Global Insight, said: 'The UK's recent poor productivity performance has raised concern over the growth potential of the UK economy, although it is not clear how much of the weakness is due to cyclical rather than structural factors.

'There is little doubt that productivity has been limited by a combination of recent weak economic activity and companies choosing to hold on to workers.'

He added that cut backs in investment between 2008 and 2009 are having repercussions today. 'It is to be hoped that going forward the sharp pruning of the public sector and the necessary increased focus on the private sector to lead the economy forward will lead to improvements in productivity,' he said.

'The Government will certainly be hoping that over time its micro reforms will provide an environment in which businesses are more prepared to engage in longer-term investment and employment plans and commit to boost employees' skills.'

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