Slow productivity will weigh on UK economy

Significance

This is the result of low levels of private and public investment, deficiencies in skills and training, and contractionary fiscal policy. The government is intent on addressing the productivity problem, but its chances of success are reduced by Brexit and the economic impact of the COVID-19 pandemic.

Impacts

• The furlough scheme may have kept unproductive businesses afloat, potentially prolonging their economic significance.
• The expansion of the digital economy seen over the past year and a half could slow down after all COVID-19 restrictions end.
• Tensions over the Northern Ireland protocol in the autumn could undermine EU-UK trade relations further.