UK Labour Productivity Since the Onset of the Crisis — An International and Historical Perspective

9 Pages Posted: 6 Jul 2012

See all articles by Abigail Hughes

Abigail Hughes

Bank of England

Jumana Saleheen

Vanguard Asset Management Ltd

Date Written: June 20, 2012

Abstract

UK labour productivity has been persistently weak since the onset of the recent financial crisis. This suggests that there is significant spare capacity within UK companies, but business surveys instead point to little spare capacity. This article aims to shed light on this puzzle by looking at cross-country and historical evidence. It finds that it has been unusual to see persistently weak labour productivity after previous financial crises in advanced economies. UK labour productivity stands out as being weak relative to historic episodes; it is also weak compared to other countries in the recent crisis. This weakness is concentrated in the energy and service sectors, suggesting the supply potential of the economy has grown more slowly than usual since the start of the crisis.

Suggested Citation

Hughes, Abigail and Saleheen, Jumana, UK Labour Productivity Since the Onset of the Crisis — An International and Historical Perspective (June 20, 2012). Bank of England Quarterly Bulletin 2012 Q2, Available at SSRN: https://ssrn.com/abstract=2101104

Abigail Hughes (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Jumana Saleheen

Vanguard Asset Management Ltd ( email )

25 Walbrook
London, EC4N 8AF
United Kingdom

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