Double dose of strong results
The economy has seen the strongest two quarters of productivity growth in a decade, with Office for National Statistics figures showing the government on course to borrow significantly less than expected in 2017-18 as well as strong productivity growth in the fourth quarter of 2017.
According to the ONS, the output per hour rose 0.8 per cent in the three months to December. It follows growth of 0.9 per cent in the previous period.
Productivity, a key driver of economic growth, is measured by the amount of work produced per working hour. UK policy makers have wrestled with the challenge of low productivity growth since the financial crisis.
There was also a better than expected rise in wages. Excluding bonuses, earnings rose by 2.5 per cent year-on-year.
John Hawksworth, economist at PwC, told media that today’s figures would be a “welcome windfall” for chancellor Philip Hammond, who is due to present his spring fiscal statement on March 13.
“We would expect him to bank it for now rather than spending it in his March spring statement, which looks set to be a low key affair,” added Mr Hawksworth.
“The chancellor will want to retain as much room for manoeuvre as possible for his next Budget in November, bearing in mind ongoing uncertainties around the Brexit negotiations.”