Box D: Understanding Productivity Variations across the United Kingdom

Arnab Bhattacharjee () and Gopal K. Basak

National Institute UK Economic Outlook, 2025, issue 19, 58-62

Abstract: Since the 2008–09 financial crisis, the UK productivity performance has been poor by historical standards and by international comparison, certainly in relation to that of the United States (NIESR, 2022). In addition to the overall productivity slowdown, the UK economy also exhibits two other patterns. One is weak regional productivity across the country, except for London, the metropolitan parts of the South East and certain metropolitan areas such as Manchester (van Ark et al., 2025). The other related pattern is significant regional productivity variation. According to the ONS (2025), labour productivity, measured by output per hour worked, in London was 28.5 per cent above the UK average and output per job was 35.3 per cent above the UK average in 2023. That same year, the North West made the largest positive contribution (0.9 per cent) to productivity growth when compared with 2019 (pre–Covid), while London made the largest negative contribution (–0.3 per cent).

Date: 2025
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