Summary Statement: The UK has had fairly bad productivity over recent years, however there is some sign that is changing. Private sector productivity grew by 1.8 per cent in the second quarter compared with a year earlier, up from 1.2 per cent previously, according to Morgan Stanley. The question then is what causes it, and how long it will last. Tech-driven improvements seem to be the explanation given. Will the the persistent improvement in productivity growth we have seen in the US post-Covid will, with a delay, translate to a similar pick-up in the UK, as AI adoption plays an increasing role? However, Michael Saunders, a former BoE rate-setter, said the UK sectors that had registered the biggest pick-up in productivity in the past couple of years included accommodation, wholesale and retail, which are not leading adopters of AI. These are areas where businesses have slowed hiring or cut headcount. If the higher productivity comes as people are priced out of jobs without being able to find alternative opportunities, it represents a less benign picture of the economy’s performance.
Relevant to Neoliberal: Discussions about UK economy, and what has previously caused the productivity issues and why it is now showing signs of a productivity boost
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Summary Statement: The UK has had fairly bad productivity over recent years, however there is some sign that is changing. Private sector productivity grew by 1.8 per cent in the second quarter compared with a year earlier, up from 1.2 per cent previously, according to Morgan Stanley. The question then is what causes it, and how long it will last. Tech-driven improvements seem to be the explanation given. Will the the persistent improvement in productivity growth we have seen in the US post-Covid will, with a delay, translate to a similar pick-up in the UK, as AI adoption plays an increasing role? However, Michael Saunders, a former BoE rate-setter, said the UK sectors that had registered the biggest pick-up in productivity in the past couple of years included accommodation, wholesale and retail, which are not leading adopters of AI. These are areas where businesses have slowed hiring or cut headcount. If the higher productivity comes as people are priced out of jobs without being able to find alternative opportunities, it represents a less benign picture of the economy’s performance.
Relevant to Neoliberal: Discussions about UK economy, and what has previously caused the productivity issues and why it is now showing signs of a productivity boost
We knew it’d work after the 6th prime minister