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UK economy probably slowing but productivity grows

Wednesday, April 05, 2017 - 01:35

British economic productivity grew at its fastest rate in more than a year in the final three months of 2016. But as Sara Hemrajani reports, it may not be growing fast enough to counter the impact of Brexit.

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Keeping the wheels turning. This factory - a hive of activity - in west London. And there are signs workers across the country are also shifting up a gear. Labour productivity grew at its fastest rate in more than a year in the final three months of 2016. Still, Britain lags behind rivals Germany, France and the U.S. But analysts say the service-dominant economy means output is hard to accurately measure. Soundbite: Justin Urquhart-Stewart, Marketing Director, Seven Investment Management, saying (English): "Now, manufacturing is quite easy to measure productivity and actualy our productivity in those sectors are generally pretty good. You go to the Nissan car plant and those are world levels of productivity, highly efficient. However, the majority of the UK economy is in the service sector and that service sector is much more difficult to measure productivity. How do you measure productivity by just operations on computers and such like?" That vital services sector seems to be expanding. March's services index rose to a three month high, but further Brexit uncertainty could make an impact. Soundbite: Justin Urquhart-Stewart, Marketing Director, Seven Investment Management, saying (English): "The outlook though is slightly more concerning, particularly when it comes to investment from corporates and external investment in to the UK. And already we're getting comments with regards to those banks moving certain staff and key units over to euro zone and away from the UK and particularly out of London." A cooling jobs market is a risk. One survey shows that businesses in the UK hired people at the slowest pace in seven months.

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UK economy probably slowing but productivity grows

Wednesday, April 05, 2017 - 01:35