Productivity growth comes to an end with 0.5% fall
Productivity fell in the first few months of the year, bringing an end to a recent run of growth, new figures have shown.
The Office for National Statistics said labour productivity as measured by output per hour fell by 0.5% from the final quarter of 2016 to the first three months of this year.
It was the first fall since the end of 2015.
ONS head of productivity Philip Wales said: "UK labour productivity growth has struggled since the 2008 economic downturn, and the fall in the first quarter of 2017 brings to an end a recent run of quarters of positive growth.
"The experimental statistics that ONS releases today also reveal striking differences in productivity in different industries and regions.
"In 2015, output per hour worked in London's financial and insurance industries was around seven times higher than in the lowest productivity regional industries."
Mike Cherry, chairman of the Federation of Small Businesses, said: " Today's disappointing statistics throw fresh light on persistent structural weaknesses in the UK economy.
"Productivity is being stifled by chronic under-investment, exacerbated by current unprecedented uncertainty, and reflected in sluggish wage growth.
"We know that small firms are continuing to hire but are struggling to pay more as they absorb surging business costs, now at their highest in four years."
Ian Brinkley, acting chief economist at the Chartered Institute of Personnel and Development, said: "Today's figures should act as a very sharp reminder to Government that Brexit is not the only challenge facing the UK.
"Unless more is done to tackle the nation's low productivity, people's wages and living standards will continue to fall and the UK will be ill-equipped to compete once we do leave the EU.
"Government must urgently review its productivity plan and ensure that its industrial strategy includes a much stronger focus on boosting investment in skills and efforts to boost managerial quality in partnership with employers, professional bodies and unions at a national, sector and local level."
Shadow chancellor John McDonnell said: " When Philip Hammond became Chancellor he made productivity one of his central policy aims, but what we see today is that it is going backwards on his watch and if anything, he has made matters worse by continuing with the failed policy of austerity.
"Not content with cutting public sector workers' pay, the Government's failure to invest in the British economy means private sector wages continue to stagnate thanks to weak productivity, making the Chancellor's boasts about the economy look increasingly laughable."