Blog by author

Nick Oulton

Posted: 10 September, 2018 - 10:36

The greatest challenge facing UK economic policy, far larger than Brexit, is zero productivity growth since the start of the Great Recession in 2008. The OECD recently projected that the UK’s GDP per capita will be 3% lower by 2030 than it would have been if the UK remained in the EU. This compares with a loss of about 21% in GDP per hour that has already been incurred as a result of stagnating productivity since 2007. This lost decade is even more surprising given that before the crisis the UK’s productivity growth rate was one of the highest amongst the advanced economies. Hence this is commonly referred to as the productivity puzzle. (For more on UK productivity and the puzzle see the Special Issue of the National Institute Economic Review for August 2017)