The so-called ‘productivity puzzle’ that has dogged Britain and plagued economists for a decade, just got uglier. Not only is the economy growing far more slowly than it used to – and is today 20 per cent smaller than it would be if we’d continued growing like it was in the early noughties (2000s) – but in Q2 2019 manufacturing productivity dropped by 1.9 per cent and services shrank 0.8 per cent. This data, published yesterday by the Office for National Statistics, io shockingly awful and its chief economist Richard Hays says: ‘’This confirms the broad base of the UK’s productivity challenges’’. I’d add that their data might be flawed. They have looked high and low for someone to fill the top job, at a salary of £160K, in Newport, south Wales, for the best part of a year. Dragged out of retirement, Sir Ian Diamond, 65, will take up the position on the 22nd of this month.
Yesterday, in her maiden speech as head of the IMF, ex-head of the World Bank Kristalina Georgieva said trade wars could cut $700 billion from global GDP next year and that this could cause up to 40 per cent, or $19 trillion of corporate debt, to default. She added: ‘’The fractures [in the world economy] are spreading. Currencies are once again in the spotlight’’.
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