Britain’s Productivity Plummets – The Economy’s Losing Battle
Slump That Strikes Like a Hammer
According to the Resolution Foundation, Britain’s productivity has hit a nadir that’s not seen since the 1970s. “GDP per head dropped 0.5% between 2019 and 2024,” the report notes, marking the deepest slump since the financial crisis.
Chancellor’s Plan on Thin Ice
Chancellor Rachel Reeves had a bold growth agenda in her Autumn Budget, but the new reality looks like a circus act, with government borrowing soaring and a sweeping global tariff war adding extra cha‑cha. The plan now feels like a ship trying to keep afloat in a stormy sea.
Resolution Foundation Speaks Out
Simon Pittaway of the think tank warns that Britain’s productivity record was already dire in the 2010s, and it deteriorated further during the 2020s. “The recent slump feels like the worst since that brutal financial crisis,” he explains.
Tax & Investment Tweaks? What Could Help?
- Planning reforms – the government has taken some welcome steps, but more is still needed.
- Make the tax system friendlier to growth – tweak it to support investment and dynamism.
- Reduce distortions caused by non‑residential stamp duty and the VAT registration threshold.
- Shift tax incentives from small businesses to high‑growth new firms.
Urgent Action Needed
The think tank warns that Britain is carrying an unenviable double‑whammy: falling productivity and the G7’s biggest drop in working‑age employment since before the pandemic. It’s time for the government to reverse the malaise and put this right at the front of the priority list.
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