## United Kingdom: Selected Issues

_IMF Staff Country Reports, July 25, 2025_

## Source details

**Canonical URL:** [United Kingdom: Selected Issues](https://www.imf.org/en/publications/cr/issues/2025/07/24/united-kingdom-selected-issues-568908)

## Other formats

- [Markdown version](/en/publications/cr/issues/2025/07/24/united-kingdom-selected-issues-568908/index.md)
- [Structured JSON version](/en/publications/cr/issues/2025/07/24/united-kingdom-selected-issues-568908/index.json)
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## Bibliographic details
- Published: July 25, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229018746.002

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### Summary findings
- Examines the evolution of labor productivity, defined as output per worker, in the United Kingdom over the past two decades.
- Identifies a significant widening of the productivity gap with the United States, particularly after the Global Financial Crisis (GFC).
- Highlights that the loss of pre-GFC growth engines, especially the leverage-driven boom in the financial sector, is a major factor in the divergence.
- Notes that outside the financial sector, UK publicly listed companies, particularly frontier firms, have also lagged behind their US counterparts due to a substantial decline in total factor productivity (TFP) growth post-GFC.
- Attributes the decline in TFP growth to reduced investment in intangible capital and lower R&D spending compared to the US.

### Microeconomic drivers and evidence
- Uses sectoral and firm-level data to explore microeconomic drivers behind the UK–US productivity divergence.
- Financial sector: loss of pre-GFC leverage-driven growth materially reduced a prior engine of productivity growth.
- Non-financial publicly listed companies: frontier firms exhibit a notable post-GFC slowdown in TFP growth relative to US peers.
- Investment patterns: reduced investment in intangible capital and lower R&D spending are identified as proximate contributors to slower TFP growth.

### Policy recommendations
- Recommends a two-pronged strategy to raise productivity growth:
  - Revitalize traditional growth engines, particularly in the financial and Information and Communication Technology sectors.
  - Foster a more supportive environment for business innovation by increasing access to scale-up finance and retaining high-skilled individuals.

### Key themes and subjects
- Capital productivity
- Labor productivity
- Production
- Productivity
- Total factor productivity
- Emphasis on sectoral productivity patterns, frontier firms, intangible capital, R&D, and UK IP

*United Kingdom: Selected Issues — IMF Staff Country Reports, July 25, 2025.*

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## Content in this bundle

- **Great Britain: Selected Issues; IMF Country Report No. 25/205; July 2025**
  - [Great Britain: Selected Issues; IMF Country Report No. 25/205; July 2025 (Markdown version)](/-/media/files/publications/cr/2025/english/1gbrea2025002-source-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Great Britain: Selected Issues; IMF Country Report No. 25/205; July 2025 (PDF)](/-/media/files/publications/cr/2025/english/1gbrea2025002-source-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2025/07/24/united-kingdom-selected-issues-568908_