Why is UK unemployment still low? We are working longer hours

Pay has not recovered from the 2008 crisis so staff work longer to fill the gap, boosting labour supply and limiting wage rises

Turn the clock back a decade. The economy is just about to emerge from its worst recession in living memory. Since the start of 2008, output has contracted sharply quarter after quarter. The banks have been saved but the official unemployment rate has hit 8%, a 13-year high.

Now imagine you had a crystal ball that could foresee what would happen over the next 10 years. Hard though it is to believe, your crystal ball tells you there will be no real recovery from the slump. Productivity growth - which had been averaging 2% a year up until 2008 - will collapse. The economy in 2019 will be at least 15% smaller than it would otherwise have been had the financial crisis never happened.

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