Task 1: ESSAY (20%) Jon Boys, from the Chartered Institute of Personnel and Development, said: "Businesses may Please read the article below relating to the problems facing Productivity and Economic have more immediate concerns than raising productivity, but it's the only way to increase pay Growth in the UK, and provide a comprehensive response to the tasks outlined packets in the long term UK productivity suffers worst drop in five years Howard Archer, chief economic adviser to the EY Item Club, commented: "Heightened concerns over Brexit - especially serious concerns among many companies of the UK leaving the EU without a deal - has clearly caused companies to limit their investment with damaging implications K fell at its fastest annual pace in five years in the April-to-June quarter, or productivity. "If a Brexit deal is agreed and enacted by 31 October, this will hopefully dilute according to the Office for National Statistics. The figure - measured by output per hour - fell by business uncertainty and provide some boost to business investment, which would be good .5%, after two previous quarters of zero growth. news for productivity prospects." Both services and manufacturing saw a fall from April to June, the ONS said. It added: "This Adapted from BBC News (8 October 2019): UK productivity suffers worst drop in five years. sustained period of declining labour productivity represents a continuation of the UK's Available from https://www.bbc.co.ukews/business-49971853 'productivity puzzle'. " The ONS added that productivity since the economic downturn in 2008 was "growing more slowly than during the long period prior to downturn". UK productivity has flatlined since the recession Question 1: Index 105 Output per Hour With the use of statistics, illustrate the fluctuations in UK Productivity over the past 10 years and comment on any significant changes. (15 Marks) 85 75 70 Question 2: 1995 1999 2003 2007 2011 2015 2019 Source: Office for National Statistics BBC Identify and examine the main causes of the 'Producitivity Gap' in the UK. (25 Marks) Tej Parikh, chief economist at the Institute of Directors, said: "These figures hammer home the Use empirical evidence to support international comparison. impact uncertainty is having on the business environment. "Unsure of what's around the corner, businesses' investment in the new equipment and technology that drives up their performance has been stifled (held back). Many companies are also trimming their investment pipelines for the year ahead to build up a cash cushion in anticipation of challenging economic conditions ahead." Question 3: Andrew Walker, BBC economics correspondent asks: Why does productivity, the amount of Examine the extent to which economic policies could help to improve Economic Growth and output you get from each worker, matter so much? increase Productivity in the UK. (50 Marks) In the long term, rising living standards need rising productivity. There's a well-known line from the Nobel Prize-winning economist Paul Krugman on this: "Productivity isn't everything, but in the long run it is almost everything. A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker". The period of weak productivity growth after the financial crisis has been a time when the economy has, for most of the time, been growing but not strongly. The one rather brighter spot has been the other element in the productivity calculation, employment. Britain now has the highest percentage of the population in employment since at least 1971 (that's how far back this particular data series goes). More jobs, but less productive than they would have been, had productivity grown at the rates we have seen in previous decades. 3