UK workers are losing thousands of pounds due to growth stagnation

The UK’s productivity rate is half of that seen in other advanced economies and wages have subsequently flatlined, meaning that workers are losing an average of £10,700 a year.

The report, published on Monday, also estimates that nine million younger employees have never worked in an economy with sustained average wage rises.

“Brexit, Covid-19 and the cost-of-living crisis have tested an economy already under strain,” said Alex Beer, head of portfolio development at the Nuffield Foundation.

Current inequalities are particularly affecting living standards for low-to-middle-income individuals as the nation has failed to recover from the 2008 financial crisis.

Whilst the UK was closing the productivity gap with countries like France, Germany and the US during the 1990s and early 2000s, this trend has been inversed since the markets crashed.

The Resolution Foundation and LSE say the typical UK household is now £8,300 poorer than their peers in European countries like France and Germany.

In light of this disparity, the new report states the government's current fiscal plan is “not serious”.

Researchers propose that the UK's living standards could be improved by boosting public investment to 3% of GDP and by building on the nation’s “strengths as a services superpower”.

At the moment, the Conservative Party plans to cut investment to 1.8% of GDP by 2028/2029.

UK Chancellor Jeremy Hunt and leader of the Labour opposition party Keir Starmer are speaking at a Resolution Foundation event today to launch the report, the findings of which could shape government agenda.

One of the key recommendations is that more competitive pressure should be placed on British businesses by granting tax breaks to young rather than small firms.

This means that