The recent acceleration in productivity growth to a decade high of more than 2% y/y has renewed hopes that we could finally be seeing a structural pick-up linked to a new wave of technological advances. We are optimistic about the potential for another technology-related boom over the long-term, but this latest pick-up in productivity growth has not been accompanied by a surge in capital investment nor a boom in productivity within technology-specific sectors. For those reasons it is more likely to be a temporary cyclical acceleration, which could fade soon as labour market conditions deteriorate.
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