UK's OBR to cut forecasts for potential productivity over the next 5 years
UK Office for Budget Responsibility out with a statement 10 Oct
- abnormally low level of interest rates could be weighing on productivity growth
- we anticipate significantly reducing our assumptions for potential productivity over the next 5 years in our Nov budget report
- heightened uncertainty created by Brexit might encourage firms to hire flexible labour rather than less easily reversed investment.
More soggy news from the UK. The BOE focuses hard on productivity and has often expressed concerns.
GBPUSD down to 1.3192 from 1.3202 as some USD demand returns and cable sellers prevail.
Full OBR report here
Update 10.25 GMT
Response from HM Treasury:
Productivity has been a longstanding challenge for the UK economy, which is why we are focussed on boosting our performance to deliver higher living standards and build an economy that works for everyone. This includes £23 billion of investment in infrastructure, research and housing, and an ambitious Industrial Strategy to boost productivity across every region.
Blah blah. You get the picture.