The UK economy is in desperate need of a
Productivity – often measured as output per hour – is the key driver of economic growth which in turn determines real wages, profits and tax revenues. But productivity is no higher now than it was just before the 2008 financial crisis and the OBR has today revised down its forecasts of future productivity growth.
The chancellor pretended to be the investor that the economy needs but he reverted to type with a budget based on the narrow principles of accountancy and the constraints of fiscal rules. Hammond outlined a hotchpotch of “action plans”, “task forces” and “reviews”. The one substantive policy was the much-needed investment in housing but even here the policy is a combination of “capital, loans and guarantees” with little detail of how much will be new money.
