Productivity puzzle remains for UK business

Figures from the Office for National Statistics showed productivity fell 0.4 per cent in the three months to the end of March, as compared with the prior quarter, the first contraction for a year.

The ONS said the fall was due to strength in employment growth combined with weaker growth in output.

Productivity was hit in both the services and manufacturing sectors, falling by 0.2 per cent and 1.7 per cent respectively.

The ONS warned that productivity remained “noticeably below” the two per cent growth rate observed ahead of the 2008 financial crisis.

This so-called “productivity puzzle” is holding back wage increases and restricting the UK’s overall economic growth, economists said.