- Productivity in the UK is growing more strongly than official figures suggest, according to analysis from the Resolution Foundation.
- Official figures from the Labour Force Survey (LFS) indicate productivity has been falling by 0.2% a year over two years to Q2 2026.
- In contrast, the Resolution Foundation's admin-based estimates show a swing from -0.7% to +1.1% annual growth over the same period.
- The thinktank argues that the improvement is real and broad, with 12 of 19 sectors contributing to the productivity growth.
- The report is the latest to present an optimistic view, following official figures that show the UK as the joint fastest-growing G7 economy in the first half of 2026.
- The Resolution Foundation suggests that the chancellor may have inherited an economy finally starting to emerge from the long shadow of the 2008 global financial crisis.
- Simon Pittaway, the thinktank’s principal economist, stated that Britain’s dismal productivity record since the global financial crisis explains much of its economic stagnation and weak living standards growth.
The Resolution Foundation has revealed that UK productivity is growing faster than previously reported, with an average annual growth of 1.1% since Q3 2024. This contrasts sharply with the 0.7% per year decline noted in the two years prior, indicating a significant recovery.6
According to Simon Pittaway, the thinktank's principal economist, the UK's dismal productivity record since the 2008 financial crisis has contributed to economic stagnation and weak living standards. He stated, “Britain’s dismal productivity record since the global financial crisis explains a lot of its economic stagnation and weak living standards growth.”7
The report suggests that the productivity uptick is not solely due to job cuts in low-skilled sectors, as the share of the workforce in hospitality remains stable. Pittaway emphasized, “Some have suggested that recent productivity gains have been driven by an early AI boom... But neither explanation is borne out by the data.” Instead, the productivity recovery is attributed to existing workers in the same sectors.
The analysis indicates that 12 of the UK’s 19 main sectors contributed positively to productivity growth, with the information and communication sector being the largest contributor at 0.5 percentage points annually. This broad improvement suggests a more optimistic outlook for the UK economy, which was recently noted as the joint fastest-growing in the G7 for the first half of 2026.5
Overall, the Resolution Foundation's findings challenge the narrative of persistent stagnation, suggesting a potential turning point for the UK economy as it emerges from the long shadow of the 2008 crisis.3
“The thinktank's preferred admin-based measure shows output per hour grew 1.1% annually over two years to Q2 2026, versus a 0.7% fall in the prior two years. Simon Pittaway said the recovery is broad, with 12 of 19 sectors contributing, and not driven by AI or sectoral shifts.”
The Guardian
