Productivity across the UK economy rose at its fastest rate in four years in the second quarter according to the Office for National Statistics (ONS). However the news coincided with two surveys showing UK manufacturing struggling to maintain growth.
Productivity is a key indicator for the Bank of England as it considers whether to put up interest rates. Output per hour rose 0.9% between April and June, the biggest quarter-on-quarter rise in four years.
Output per hour expresses the amount produced by a company after all its costs have been stripped out. The more efficient, or productive, the company, the greater its level of output per hour. Since 2009 output per hour has expanded at an average quarterly rate of between 0.2% and 0.3%.
The ONS also said unit labour costs – the cost to companies of employing staff – rose 2.2% in the second quarter versus the same time last year – the fastest rate since the fourth quarter of 2012.