The UK seems to have lost productivity - but gained jobs. This seems about right.
Has it done the right thing?
Well, in the short term governments have to make decisions and adopt strategies to solve a problem, to get out of a crisis.
The UK government seems to have adopted policies that are enabling the UK to climb out of the pit of the financial crisis .... and since competitors are doing less well, the lower productivity is not a problem.
But in the longer-term productivity IS important - it drives competitiveness and it drives wealth-creation, without creating inflation.
So the UK has to find ways of improving productivity but as part of a growing economy so it doesn't result in job losses.
Only time will tell whether the next government (after the election in May) can do this.
Has it done the right thing?
Well, in the short term governments have to make decisions and adopt strategies to solve a problem, to get out of a crisis.
The UK government seems to have adopted policies that are enabling the UK to climb out of the pit of the financial crisis .... and since competitors are doing less well, the lower productivity is not a problem.
But in the longer-term productivity IS important - it drives competitiveness and it drives wealth-creation, without creating inflation.
So the UK has to find ways of improving productivity but as part of a growing economy so it doesn't result in job losses.
Only time will tell whether the next government (after the election in May) can do this.
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