BRITAIN’S productivity has swung to a six-year high, boosting the nation’s dismal record thanks to gains from the manufacturing and financial services sectors.

Figures from the Office for National Statistics (ONS) showed labour productivity expanded by 0.9 per cent in the third quarter of last year, bouncing back from falls of 0.5 per cent and 0.1 per cent in the first and second quarters respectively.

While the jump proved the largest rise since the second quarter of 2011, there may still be a decade of stagnant growth since the financial crisis if levels fall back in the final quarter of 2017.

Howard Archer, EY Item Club’s chief economic adviser, said the indications were that productivity could grow again in the fourth quarter of last year.

He said: “We saw a much-needed pickup in UK productivity in the third quarter as output per hour rose 0.9 per cent quarter-on-quarter, which is the best performance since the second quarter of 2011.

“However, this followed declines in both the second and first quarters, and output per hour was still up only 0.8 per cent year-on-year.

“The marked third-quarter rebound suggests that some of the first-half 2017 weakness in productivity may have been cyclical.

“Businesses may have been keen to employ given concerns over potential labour shortages and also the low cost of labour.”

The third quarter proved a bright spot for the manufacturing and the services industries, which both rose by 1 per cent between April and June compared to the quarter before.

On an annual basis, manufacturers recorded a 2.1 per cent rise in the third quarter in contrast to last year, and the financial services sector grew by 4.7 per cent over the period.

However, productivity growth has remained at its lowest levels since the 1820s on a rolling 10-year basis.

The update will bring some cheer to Chancellor Philip Hammond who suffered swingeing downgrades to economic forecasts in the Autumn Budget due to Britain’s stubbornly low productivity growth.

Ian Brinkley, acting chief economist at the Chartered Institute of Personnel and Development, said: “The UK’s productivity remains well below pre-crash levels, and unless a more concerted effort is made to improve productivity, we won’t be in a strong enough position to compete once we leave the EU.”

Productivity refers to the amount of work produced either per worker or per hour worked.