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Why is outlook so bad1/31/2023 ![]() ![]() One view advanced by the US economist Robert Gordon is that the advanced world in recent years has essentially come to the end of a long era of technologically-driven productivity growth that began in the industrial revolution and that the lower rates we are experiencing today are the new normal. Yet productivity growth has also been weak by historic standards across the developed world since the global financial crisis and official forecasters have been reducing their projections for many countries, not just the UK. ![]() Some blame the ready availability of low-skilled migrant labour from the EU.Īnd it is true that something is particularly awry here in Britain, where the level of productivity has long been worse than peer economies such as France, Germany and the US. ![]() Some explanations are UK-specific such as historic under-investment in workers’ skills here, an excessively flexible British labour market, an unusually sclerotic domestic banking sector, or even damagingly loose monetary policy from the Bank of England that has kept low-productivity “zombie” firms alive. ![]()
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