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        British Finance Minister Hammond declares war on sluggish productivity


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In 2011, former British Chancellor of the Exchequer Osborne said shortly after taking office, will reinvigorate the British manufacturing industry, he promised to "many manufacturers" to make the economy back to balance.

But for nearly six years, the economy has continued to rely on services.

This week, Osborne's successor, Hammond, outlined his first priority: to reverse Britain's long-standing productivity problems and to face the challenge of withdrawing from the EU.

Hammond said in his first budget statement after he took office that productivity growth in the UK is "staggering" with almost all other wealthy nations and could erode economic and labor wages.

"We are about 30 percentage points behind the United States and Germany, more than 20 percentage points behind France and eight behind Italy," he said in parliament on Wednesday.

"This means that in reality, it takes five days for a German worker to spend four days, which means that too many British workers are overworked and underpaid, compared to other countries," he said. "If you want the economy to benefit everyone, that must change."

Mr Hammond said he would borrow ? 23bn ($ 29bn) over the next five years to invest in housing, transportation, digital infrastructure and research.

He promised to increase the share of economic infrastructure investment in economic output from the current 0.8% to 1.0-1.2% by 2020.

Despite the small size of the overall expenditure, but decided to borrow through the investment, marking the break of the former Osborn strict management of public finances.

Whether Hammond's success in boosting manufacturing productivity over previous Osborne is still unknown.

However, the challenge looks very grim. The UK's Office of Budgetary Affairs predicts a reduction in investment in retreats to Europe and a reduction in the number of migrant workers filling vacancies, weakening the company's development capacity.

The UK's Office of Budgetary Responsibility (OBR) says the impact on productivity in Europe is expected to require an additional ? 18bn over the next four years.


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