TREE NEWS update: Bank of England Monetary Policy Committee member Mann said productivity gains are being driven by a reduction in hours worked, and that this is not a good development. Mann, a member of the UK central bank’s rate-setting panel, framed the shift in working time as the source of the productivity reading rather than an improvement in output per hour.
BoE MPC member Mann: Productivity driven by fewer hours worked is not a good thing
Mann's point is that the productivity signal markets often treat as disinflationary or growth-positive is being generated by the denominator, not the numerator. That matters for how the MPC reads slack and wage pressure: if hours are falling rather than output per hour rising, the disinflationary comfort from a productivity improvement may be overstated. The open question is whether other MPC members adopt the same framing in upcoming communications, which would shift the policy debate away from headline productivity readings.
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