Productivity growth slowed markedly in the first three months of the year, official data showed yesterday.
The Office for National Statistics said UK output per worker rose by an annual 0.6 per cent in the first quarter, down from 1.6 per cent growth in the previous quarter.
"The marked slowdown in productivity in the first quarter of this year was influenced significantly by sharply reduced GDP growth, as well as by companies holding on to workers at this stage," said Howard Archer, an economist at Global Insight.
A breakdown showed services productivity growth slowed markedly to 0.8 per cent from 1.9 per cent in the previous quarter. Manufacturing productivity growth actually rose, to 2.6 per cent from 2.1 per cent in the previous quarter.
Unit wage costs growth was 2.6 per cent for the economy as a whole, up from 2.1 per cent in the previous quarter.