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Box C: Finance, business investment and productivity

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  • Issam Samiri

Abstract

As labour supply in the United Kingdom nears capacity, the performance of labour productivity, defined as output per hour worked is crucial to future growth. Labour productivity growth is typically attributed to three factors: changes in labour force quality, changes in the capital stock, and a total factor productivity residual (TFP), which represents the state of available technology. Here, I concentrate on the potential impact of the recent Bank of England tightening, and changing financial conditions more generally, on business investment, which ultimately influences labour productivity growth.

Suggested Citation

  • Issam Samiri, 2023. "Box C: Finance, business investment and productivity," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 10, pages 25-29.
  • Handle: RePEc:nsr:niesra:i:10:y:2023:p:25-29
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