NEWS / Economy
ONS says UK productivity has been stronger than it looked, after revising hours worked
Kalbir Talwar
Published Sep 17, 2026
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Summary:
- The ONS unveiled a new way of measuring productivity that reduces estimated hours worked, revealing the UK has been more efficient than previously measured.
- Under the revision, output per hour rose at an annual rate of 1.3% over the decade ending in 2019, not 0.7%, bringing it closer to the roughly 2% tempo recorded before 2008.
- The findings add to recent evidence of unexpected economic resilience and hand Chancellor John Healey a timely boost before next month’s budget.
What the ONS changed
On Thursday the Office for National Statistics rolled out a “component approach” that builds hours worked from the ground up, explicitly factoring in time off for holidays, sickness and similar shifts in working patterns. It draws on household and business surveys alongside administrative records. The result is fewer hours on the clock than previously estimated, which lifts productivity per hour.
How the numbers move
The ONS also reports that in 2024 output per hour stood 40.7% above its 1997 level, more than six percentage points higher than the earlier estimate for that span.
What the report says about the puzzle and the pandemic
The revision reshapes, but does not erase, the story that the UK slowed more than many peer economies after 2008. As the ONS puts it, “Under the component approach, improvements to actual hours worked can explain half of the productivity slowdown,” since 2008. “The ‘productivity puzzle’ therefore remains under both approaches, but it is smaller under the component approach framework.” During the pandemic, when furlough was concentrated in lower productivity industries, those who continued working saw productivity move back toward its pre‑2008 trend.
Process, timing and implications
According to the ONS, it has been consulting stakeholders on the redesign, among them the UK Treasury, and from November the component approach will be the official measure of productivity. The agency stressed there is no change to current GDP figures. Later this year, once the annual GDP dataset is released, it plans to publish productivity estimates up to the second quarter of 2026 and then incorporate the method into headline statistics.
The update lands amid a run of stronger than expected growth and offers some fiscal breathing room for Chancellor of the Exchequer John Healey as he prepares next month’s budget and confronts widening holes in the public finances. It also follows a period when the statistics office came under scrutiny over labor market, prices and GDP data, prompting reviews and aligning with National Statistician Ian Diamond’s sudden exit last year for health reasons. His replacement was named last week, over a year after he left the post.
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A clearer read on how much work actually gets done matters for your wallet too. If workers have been more productive than we thought, that can shape wage dynamics, inflation pressure and the path of interest rates, which flow through to mortgages and savings yields.
A clearer picture of work and output reminds savers to keep a calm growth plan. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That’s Losing its Value, on September 29th. Sign up free to join him live.
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