The Resolution Foundation, a leading think-tank, warns that record immigration has not increased wealth for Britons and is masking a productivity crisis. The UK economy has grown since 2010, largely due to a population increase driven by inward migration. However, GDP per capita has only grown by 4.3% over the past 16 years, compared to 46% in the previous 16 years.
The think-tank highlighted the UK’s poor productivity growth, the slowest in nearly 200 years, with average annual productivity growth at 0.4% over the past 16 years. This has left average wages £14,000 below the pre-crisis trend. The end of a decade-long jobs boom has exposed these productivity issues.
The Institute for Fiscal Studies (IFS) also noted that under Prime Minister Rishi Sunak, the size of the state has increased significantly due to surging debt interest and a growing benefits bill. Public spending is forecast to be £80 billion higher by the end of the decade compared to pre-pandemic levels.
The Resolution Foundation pointed out that the UK’s “middling growth record” has been supported by a booming population, but this has not translated into significant improvements in living standards. The next government will need to focus on improving productivity to ensure sustainable economic growth.
Greg Thwaites, research director at the Resolution Foundation, emphasized the need for the next government to build on Britain’s strong services exports to improve economic performance over the coming decade.
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