Productivity growth slows sharply

LONDON (Reuters) - Productivity growth slowed markedly in the first three months of the year, official data showed on Monday.

The Office for National Statistics said UK output per worker rose by an annual 0.6 percent in the first quarter, down from 1.6 percent growth in the previous quarter.

"The marked slowdown in productivity in the first quarter of 2008 was influenced significantly by sharply reduced GDP growth, as well as by companies holding on to workers at this stage," said Howard Archer, an economist at Global Insight.

A breakdown showed services productivity growth slowed markedly to 0.8 percent from 1.9 percent in the previous quarter. Manufacturing productivity growth actually rose, to 2.6 percent from 2.1 percent in the previous quarter.

Unit wage costs growth was 2.6 percent for the economy as a whole, up from 2.1 percent in the previous quarter.