1 00:00:00,000 --> 00:00:02,700 Britain produces much more economic value 2 00:00:02,700 --> 00:00:05,800 per hour of work than it did 30 years ago, 3 00:00:05,800 --> 00:00:08,300 but that success hides a problem. 4 00:00:08,300 --> 00:00:10,800 According to a revised experimental estimate 5 00:00:10,800 --> 00:00:13,000 from the Office for National Statistics, 6 00:00:13,000 --> 00:00:18,000 UK output per hour was 40.7% higher in 2024 than in 1997. 7 00:00:19,800 --> 00:00:22,000 That is real progress. 8 00:00:22,000 --> 00:00:24,300 Yet the rate of improvement slowed sharply 9 00:00:24,300 --> 00:00:27,200 after the 2008 financial crisis. 10 00:00:27,200 --> 00:00:28,800 Under that revised measure, 11 00:00:28,800 --> 00:00:32,800 productivity grew by roughly 2% a year before the crisis 12 00:00:32,800 --> 00:00:37,800 versus around 1.3% a year between 2009 and 2019. 13 00:00:38,700 --> 00:00:40,300 The slowdown remains, 14 00:00:40,300 --> 00:00:43,400 although its size changes with the measurement method. 15 00:00:43,400 --> 00:00:47,400 So how does Britain compare with the other G7 economies? 16 00:00:47,400 --> 00:00:50,000 You have to ask two different questions. 17 00:00:50,000 --> 00:00:52,400 How much value is produced per hour? 18 00:00:52,400 --> 00:00:54,800 And how fast is that improving? 19 00:00:54,800 --> 00:00:57,100 Using comparable OECD data 20 00:00:57,100 --> 00:01:00,000 and purchasing power adjustments is essential. 21 00:01:00,000 --> 00:01:02,900 Otherwise, international rankings can mislead. 22 00:01:02,900 --> 00:01:04,400 The story also changes 23 00:01:04,400 --> 00:01:07,200 depending on where you look within the UK. 24 00:01:07,200 --> 00:01:10,000 In 2023, London's output per hour 25 00:01:10,000 --> 00:01:13,500 was 28.5% above the UK average. 26 00:01:13,500 --> 00:01:16,600 The South East was 7.7% above. 27 00:01:16,600 --> 00:01:18,700 Every other nation or English region 28 00:01:18,700 --> 00:01:20,500 was below that average. 29 00:01:20,500 --> 00:01:23,800 That does not mean anybody elsewhere works less hard. 30 00:01:23,800 --> 00:01:26,600 The jobs available, investment, equipment, 31 00:01:26,600 --> 00:01:29,900 infrastructure and mix of industries all matter. 32 00:01:29,900 --> 00:01:32,100 And even when productivity improves, 33 00:01:32,100 --> 00:01:35,300 it doesn't automatically show up in people's wallets. 34 00:01:35,300 --> 00:01:39,300 Pay might rise, profits might rise, prices might fall, 35 00:01:39,300 --> 00:01:41,500 or firms might reinvest. 36 00:01:41,500 --> 00:01:45,000 Meanwhile, rents, mortgages, energy and food bills 37 00:01:45,000 --> 00:01:47,200 shape what families can afford. 38 00:01:47,200 --> 00:01:49,800 Real wages and household spending power 39 00:01:49,800 --> 00:01:52,800 are not the same thing as output per hour. 40 00:01:52,800 --> 00:01:55,900 Businesses also face changing costs. 41 00:01:55,900 --> 00:01:58,900 Across the UK, the Office for National Statistics 42 00:01:58,900 --> 00:02:02,800 unit labour cost index rose by about 98% 43 00:02:02,800 --> 00:02:07,800 between the first quarters of 1997 and 2024 in cash terms. 44 00:02:08,400 --> 00:02:11,200 This measures labour costs per unit of output, 45 00:02:11,200 --> 00:02:13,600 including employer contributions. 46 00:02:13,600 --> 00:02:17,700 It's an economy-wide measure, not Dan's actual bill. 47 00:02:17,700 --> 00:02:21,800 Energy, ingredients, rent and selling prices matter too 48 00:02:21,800 --> 00:02:23,800 and vary between businesses. 49 00:02:23,800 --> 00:02:27,200 Higher costs alone do not tell us what happened to profit. 50 00:02:27,200 --> 00:02:29,800 Though, what could change Britain's future? 51 00:02:29,800 --> 00:02:32,900 Better business investment, skills, technology, 52 00:02:32,900 --> 00:02:35,900 infrastructure and innovation can all help, 53 00:02:35,900 --> 00:02:38,500 but there is no single magic lever. 54 00:02:38,500 --> 00:02:41,700 The question isn't just whether Britain can produce more, 55 00:02:41,700 --> 00:02:43,600 it's whether those gains translate 56 00:02:43,600 --> 00:02:47,600 into better living standards across the whole United Kingdom. 57 00:02:47,600 --> 00:02:51,700 Explore the evidence and compare the data at UK Facts.