U.K. Productivity Improves In Q3

(RTTNews) - British labor productivity improved during three months to September for the first time since the second quarter of 2013, data from the Office for National Statistics showed Wednesday.

Output per hour increased 0.6 percent sequentially in the third quarter, after staying flat a quarter ago. This was the first expansion since the second quarter of 2013.

Productivity rose 0.3 percent from the same period of last year, the first increase this year, following a 0.6 percent fall in the second quarter.

Nonetheless, productivity remained about 2 percent below its level prior to the economic downturn in 2008, the ONS said.

Output per hour increased in all of the main industrial groupings in the third quarter, by 0.5 percent in the production industries and 0.6 percent in the service industries.

If productivity has taken a significant lasting hit, it means that the economy has less potential to grow without generating inflationary pressures and that interest rates will need to rise at an earlier stage, IHS Global Insight's Chief UK Economist Howard Archer said.

The recent marked overall pick up in business investment will have positive implications for future productivity growth, he noted.