The Office of National Statistics (ONS) has said that the output of labour productivity in the UK has fallen by 0.5 per cent in the first quarter of this year.

Productivity is 0.4 percent below the pre-downturn peak which was recorded at the end of 2007.

ONS said that this is the first fall in productivity since the last quarter of 2015.

ONS head of productivity Phillip Wales said: "UK labour productivity growth has struggled since the 2008 economic downturn, and the fall in the first quarter of 2017 brings to an end a recent run of quarters of positive growth"

"The experimental statistics that ONS releases today also reveal striking differences in productivity in different industries and regions. In 2015, output per hour worked in London's financial and insurance industries was around seven times higher than in the lowest productivity regional industries".

Responding to the 0.5 percent fall, national chairman of the Federation of Small Businesses Mike Cherry said: "Today's disappointing statistics throw fresh light on persistent structural weaknesses in the UK economy.

"Productivity is being stifled by chronic underinvestment, exacerbated by current unprecedented uncertainty, and reflected in sluggish wage growth.

"We know that small firms are continuing to hire, but are struggling to pay more as they absorb surging business costs, now at their highest in four years.

"Two thirds of small firms are not planning to increase capital investment over the next three months.

"One in seven are planning to decrease investment levels. No doubt some are delaying decisions as they wait for further clarity on the implications of Brexit.

"All the evidence indicates that small business productivity gains would be an economic game-changer.

"To achieve that boost, the Government has to deliver on its promise of an ambitious industrial strategy.

"It's a strategy that must have small firms at its heart, supporting them in supply chains, clamping down on late payments and improving their ability to access to finance."

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