During the latest year, there has been a seemingly puzzling divergence in British statistics, with employment increasing at a very strong rate of about 2% per year, while GDP has stagnated or declined. This divergence can either be explained by some error in employment statistics, some error in GDP statistics or a decline in productivity. Overall, falling productivity seems like the most likely and most important explanation, though some statistical error could also be involved.
The latest employment report
which showed that even as real wages continues to decline, employment griowth in Britain seems to have ceased supports the view that the British economy is in fact contracting.