Published by Global Banking & Finance Review®
Posted on February 23, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleBCG warns UK productivity has slid as former leader sectors lag. It calls for a hard‑edged, focused industrial strategy—embracing creative destruction, worker retraining and cheaper energy—to revive growth under PM Keir Starmer.
LONDON, Feb 23 (Reuters) - British corporate sectors that once drove national productivity growth have fallen behind the global leaders and the government's strategy for improvement must be hard-edged, the Boston Consulting Group, a consultancy, said on Monday.
Policymakers should encourage "creative destruction" of firms that are barely surviving and help workers to move to higher-growth areas, BCG said in a report.
Successive British governments have sought to fix the country's weak productivity record. Prime Minister Keir Starmer has promised to reform planning rules and invest more in infrastructure.
BCG said in its report:
* Businesses in manufacturing, information andcommunications and financial services accounted for 84% ofpositive productivity growth in Britain between 1997 and 2007,but only 34% in 2019-2024 * The UK's industrial strategy should be focused onsuccessful areas, have "hard edges and be relentlessly focused,rather than trying to lift growth for all sectors" * The weakest firms now produce less per worker than theydid 30 years ago, after adjusting for inflation * The financial services sector has seen little improvementsince the global financial crisis almost two decades ago * Reforms that lower energy prices would help manufacturing * Specific help for IT and communications firms should be inareas such as training, digital skills and innovation(Writing by William Schomberg)
BCG argues the UK needs a tougher, more focused industrial strategy to reverse a long slide in productivity, concentrating support on high‑growth sectors and allowing unproductive firms to exit.
Encourage creative destruction of weak firms, channel resources to successful sectors, retrain workers in digital skills, spur innovation, and lower energy costs to help manufacturing.
Manufacturing, information and communications, and financial services no longer drive gains as they once did. BCG says policy should focus on high‑potential areas and targeted skills and innovation support.
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