Domesday Live

Why isn't the economy growing faster?

UK growth has been slow since the 2008 financial crisis mainly because output per hour worked has grown much more slowly than before it. Low business investment, an ageing workforce, shocks such as the pandemic and the energy crisis, and trade barriers after Brexit all play a part.

Why it happens

• Weak productivity growth. Output per hour worked rose by about 2% a year before 2008 and well under 1% since. Without it, pay and living standards cannot grow much.
• Low business investment. The UK invests a smaller share of its income in machinery, technology and buildings than most rich countries, which holds back productivity.
• A series of shocks. The 2008 crash, Brexit, the pandemic and the energy price surge each hit output, and recoveries have been slow.
• An ageing population. A smaller share of the population is of working age, and more people are out of work with long-term sickness, so there are fewer workers growing the economy.