THE UK recorded its sharpest year-on year drop in productivity since 2014 in the second quarter, with economists citing the impact of uncertainty as Brexit worries continue to dominate.

The Office for National Statistics said yesterday that output per hour worked in the April to June quarter was down by 0.5 per cent on the same period of last year. This was the steepest year-on-year fall since the second quarter of 2014. Output per hour worked fell by 0.2% quarter-on-quarter in the three months to June. It had dropped by 0.5% in the opening three months of this year.

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Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “The drop in productivity in the first half of 2019 after an underwhelming 2018 can only fuel concerns over the UK’s overall poor productivity record since the deep 2008/09 recession.”

He added: “Part of the UK’s recent poor labour productivity performance has undoubtedly been that low wage growth has increased the attractiveness of employment for companies.”

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Mr Archer observed employment may have been lifted in recent times by some UK companies “being keen to take on workers – or at least hold on to them – given increasing concerns over labour shortages in some sectors and reports of fewer EU workers coming to the UK since the 2016 Brexit vote”.

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He said: “It also is apparent that many companies have taken on labour rather than committing to costly investment, given the highly uncertain economic and political outlook.”

Tej Parikh, chief economist at the Institute of Directors, said: “These figures hammer home the impact uncertainty is having on the business environment.”