Responding to latest official productivity figures, showing output per hour fell in the first quarter of this year, Tej Parikh, Chief Economist at the Institute of Directors, said:

“The coronavirus outbreak has caused output to grind down from the first quarter of this year, but the UK’s productivity woes didn’t begin with the pandemic.

“One silver lining from the lockdown is that it has highlighted the urgency for companies to invest in technology. Firms have been embracing digital platforms like never before. More than four out of five of our members have made adaptations, such as increased flexible working, that they intend to keep for the long run.

“However, cash will be tight in the months ahead. Ongoing uncertainty and unhealthy balance sheets will make it hard for many SME directors to invest in their organisations at this critical time. In this week’s statement, the Chancellor must shift the dial with tax incentives for business investment. Looking further ahead, enabling smaller firms to repay government loans through a student loan-style system could help the economy as a whole.”