UK Productivity Levels Dropped to Widest Gap Against G7 Since 1992

The UK's productivity gap compared with the rest of the major G7 industrialised economies was the widest since 1992 last year, according to official figures.

The Office for National Statistics (ONS) said that output per hour in the UK was 17% below the average for the rest of the G7 in 2013

The research body also found that, on an output per worker basis, UK productivity was 19% below the average for the rest of the G7 in 2013.

"Whilst pay growth has risen, it remains sluggish, reflecting persistently weak productivity," said Neil Carberry, director for employment and skills at the Confederation of British Industry.

"All politicians need to look beyond short-term headlines to policies that will boost skills and productivity, underpinning the ability of firms to pay more in future."

The ONS said that UK output per hour fell slightly in 2013 compared with 2012, contrasting with an increase of 1.0% across the rest of the G7.

In 2013, UK output per hour was roughly unchanged from its level in the pre-downturn year of 2007, but some 15-16% below a counterfactual level had the UK's strong productivity growth prior to the downturn continued.

The productivity gap on the same basis for the rest of the G7 is around 6%, according to the ONS.

The figures come after the ONS said that the UK unemployment rate dropped to 6% in the three months to August – its lowest level since 2008.

The research body found that the jobless rate fell from 6.2% in the three months to July as the number of people out of work dropped by 154,000 1.97 million.

The research body also revealed that the UK's employment rate climbed to 73.0%.

The ONS also said that the country's youth unemployment rate (for 16 to 24 year olds) dropped to 16% in the three months to August, down from 16.6% in the three months to July.