UK was behind US in productivity below the G7

The Office for National Statistics (ONS) said output per hour was 20 percentage points below the G7 average.

The UK was behind the US, Germany and France by a large margin and was slightly worse than Italy and Canada.

 

Productivity is seen as key to helping increase living standards in the UK by many experts.

"These figures show UK productivity continues to lag behind other developed economies," ONS chief economist Joe Grice said.

"Since the economic downturn, productivity growth has slowed in most developed economies, but by more in the UK than the average."

The Chancellor, George Osborne, pledged in July to take steps to encourage more long-term investment in infrastructure and by businesses to boost productivity.

Howard Archer, chief UK economist at IHS Global Insight, said British productivity had been held back since the financial crisis by the creation of lots of low-skilled, low-paid jobs where productivity is limited.

However, Institute of Directors chief economist James Sproule said that UK firms should focus on "agility" rather than productivity.

"The economy of the future looks set to be dominated not by big companies, but by fast, agile, quick-moving and reactive ones," he said.

"The firms that can respond to consumer demands most effectively and bring new products and services to market will reap the rewards."