High employment should boost productivity: Philip Hammond
London: Britain’s lacklustre rate of productivity growth should get a boost from record-high employment levels, finance minister Philip Hammond told parliament on Tuesday.
Official data earlier on Tuesday showed the proportion of working-age Britons in employment in the three months to February was the highest since records began in 1971.
Earlier data showed that in the final two quarters of 2017, productivity - measured as output per hour worked - grew by the most since 2005 after a decade of stagnation.
“We should be very cautious about interpreting those (productivity) figures. But we should expect, as we see record levels of employment in the economy, record-high employment figures, we should expect that to drive the productivity performance of the UK economy,” Hammond said.
Some economists partly blame Britain’s weak productivity on rapid job growth, and expect that businesses will need to squeeze more out of existing staff - for example by investing in labour-saving technology - once hiring becomes harder.