New data suggests the British economy may be in better health than previously believed. If you are investment planning in Cheshire or Oswestry, there may be some signs that the economy is finally putting previous financial crises behind it.
The latest report by the Resolution Foundation found that productivity is doing better than official statistics suggest. Productivity is a vital indicator of prosperity and has been sluggish in recent years. It measures every individual’s economic output, a core determinant of economic growth. The Resolution Foundation is a think tank that focuses on national living standards. It assessed the UK’s productivity record and concluded it has been improving in the mid-2020s after a dismal few years.
Different economists have come up with competing theories to explain this trend. Some have suggested that it might be related to an early AI boom and falls in low-productivity labour sectors such as retail or hospitality. Yet others are more sceptical, claiming the hospitality sector hasn’t changed much over the last decade, whilst AI cannot explain the widespread improvements across multiple industry sectors.
Either way, the report coincides with new August figures showing the UK as the joint fastest-growing G7 economy from January to June 2026. The economy, moreover, hasn’t been as badly affected by the Iran crisis as feared, whilst consumer confidence has scaled a two-year high. For their part, economists at financial services leader Morgan Stanley described the UK as being in an ‘ok place’, reflecting a relatively optimistic consensus about the state of the economy.
