Julian Jessop: Weak productivity growth since the financial crisis, the AI revolution will drive economic expansion, and excessive regulation hinders corporate performance | The Peter McCormack Show

AI advancements promise to boost productivity, challenging fears of an economic slowdown and improving living standards.

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Add us on Google by Editorial Team Jun. 6, 2026

Key Takeaways

• Productivity has been weaker since the global financial crisis, impacting economic growth.
• Enhancing productivity is crucial for improving living standards and wages without harming the environment.
• Increased regulation has diverted companies’ focus from productivity and profits.
• The size of the state has grown excessively, contributing to economic challenges.
• The AI revolution is expected to boost productivity, countering fears of a slowdown.
• Government interventions often miss addressing root causes of economic problems.
• Public opinion sometimes supports economically unsound policies.
• Inequality in the UK has remained relatively stable over the decades.
• Government policies have inadvertently discouraged hiring young people.
• The current employment system may hinder young people’s learning by making it hard to dismiss them.
• Addressing supply-side issues is key to solving economic problems.
• Technological advancements like AI could drive the next wave of economic growth.

Guest intro

Julian Jessop is an independent economist and former Chief Economist at the Institute of Economic Affairs. He has also served as Economics Fellow at the free-market think tank and writes regularly on UK growth, taxation, regulation, and economic policy.

The impact of productivity on economic growth

• Productivity has been much weaker since the global financial crisis than before.

  — Julian Jessop

• Enhancing productivity is essential for increasing wages and living standards.

• Getting productivity up is the best way to make people worth more to their employers.

  — Julian Jessop

• Improved productivity can drive economic growth without environmental damage.
• Understanding post-2008 productivity trends is crucial for economic policy.
• Weak productivity growth affects living standards and economic expansion.
• Productivity improvements are linked to sustainable economic growth.

• It’s a key driver of living standards and wages.

  — Julian Jessop

• Addressing productivity issues can lead to significant economic benefits.
• The global financial crisis marked a turning point in productivity trends.

• It’s also the best way to grow the economy without doing things like damaging the planet.

  — Julian Jessop

• Productivity is a critical factor in economic recovery and growth strategies.

The role of regulation in corporate performance

• Regulatory increases have shifted companies’ focus away from productivity and profits.

  — Julian Jessop

• Companies face challenges balancing regulation with productivity goals.
• Increased regulation can detract from corporate efficiency and profitability.
• Understanding the regulatory impact is crucial for business strategy.

• The number of people regulating and managing these rules has significantly increased.

  — Julian Jessop

• Regulation can create barriers to economic performance and growth.
• Companies may prioritize compliance over innovation due to regulatory demands.

• Companies have lost a lot of the focus on productivity and profits.

  — Julian Jessop

• Balancing regulation and economic performance is a key policy challenge.
• Excessive regulation may hinder corporate competitiveness.
• The regulatory environment influences business priorities and strategies.
• Addressing regulatory burdens can enhance corporate productivity.

Government intervention and economic challenges

• The state has become too large, contributing to economic issues.

  — Julian Jessop

• Government size and intervention are critical factors in economic policy.

• Government borrowing and public debt are far bigger than they were ten or twenty years ago.

  — Julian Jessop

• Large government can lead to inefficiencies and economic challenges.
• Understanding state intervention is vital for addressing economic issues.
• Excessive government size can strain economic resources and growth.

• The fact the state has simply got too big.

  — Julian Jessop

• Balancing government intervention with economic freedom is crucial.
• Government policies may not always address underlying economic problems.
• The size of the state is a significant factor in economic policy debates.
• Addressing government size can lead to more efficient economic management.
• Evaluating government intervention is key to economic reform strategies.

Technological advancements and productivity growth

• The AI revolution will drive productivity growth, countering claims of a structural slowdown.

  — Julian Jessop

• AI is expected to play a significant role in future economic growth.
• Technological advancements can offset productivity slowdowns.

• We’re probably in the fourth or the fifth industrial revolution already.

  — Julian Jessop

• Understanding AI’s impact is crucial for economic forecasting.
• The AI revolution offers opportunities for economic expansion.

• I think that’s clearly now out of date because we’ve now got the AI revolution coming through.

  — Julian Jessop

• Embracing technology can enhance productivity and growth.
• AI-driven productivity growth challenges pessimistic economic forecasts.
• Technological change is a key driver of economic development.
• AI advancements could reshape economic landscapes and productivity.
• Leveraging AI is essential for future economic strategies.

Government policies and their effectiveness

• Government interventions often fail to address the root causes of economic problems.

  — Julian Jessop

• Effective policy requires addressing supply-side economic issues.
• Government actions may focus on short-term fixes rather than long-term solutions.

• What governments don’t do is step back and look at the root causes.

  — Julian Jessop

• Understanding policy effectiveness is crucial for economic reform.
• Addressing root causes can lead to more sustainable economic solutions.

• Problems typically lie on the supply side of the economy rather than demand side.

  — Julian Jessop

• Evaluating government interventions is key to economic improvement.
• Effective policies require a focus on underlying economic issues.
• Government interventions should prioritize long-term economic health.
• Addressing supply-side issues is essential for effective economic policy.
• Understanding policy impacts can lead to better economic outcomes.

Public opinion and economic policy

• Public opinion often supports economically questionable policies.

  — Julian Jessop

• There is a disconnect between public sentiment and sound economic policy.
• Understanding public opinion is crucial for effective policymaking.

• There are plenty of economic policies that poll very highly.

  — Julian Jessop

• Policymakers face challenges aligning public preferences with economic principles.
• Evaluating public opinion can inform better economic strategies.

• Anybody would think are mad that nonetheless poll very highly.

  — Julian Jessop

• Addressing the gap between public opinion and policy is crucial.
• Public sentiment can influence economic policy decisions.
• Understanding voter preferences is key to effective economic governance.
• Aligning policy with sound economic principles is a policy challenge.
• Evaluating public opinion can lead to more effective economic policies.

Inequality and economic perceptions

• Inequality in the UK has not massively increased and has been relatively flat for decades.

  — Julian Jessop

• Understanding inequality trends is crucial for economic policy.
• Common perceptions about inequality may not align with data.

• Inequality has been pretty flat for decades now.

  — Julian Jessop

• Evaluating inequality is key to effective economic strategies.
• Addressing misconceptions about inequality can inform policy debates.

• In many cases has actually fallen.

  — Julian Jessop

• Understanding wealth distribution is crucial for economic reform.
• Evaluating inequality data can lead to better economic policies.
• Addressing inequality perceptions can enhance policy effectiveness.
• Understanding economic trends is key to addressing inequality issues.
• Evaluating inequality is essential for informed economic policymaking.

Employment policies and youth opportunities

• Government interventions have created disincentives for employers to hire young people.

  — Julian Jessop

• Understanding employment policies is crucial for youth opportunities.
• Government actions may inadvertently hinder youth employment.

• It’s much less attractive for employers to take on young people.

  — Julian Jessop

• Addressing employment barriers is key to improving youth opportunities.
• Evaluating employment policies can enhance youth job prospects.
• Government policies can impact youth employment and opportunities.
• Understanding policy impacts is crucial for improving youth employment.
• Evaluating government actions can lead to better employment strategies.
• Addressing employment disincentives is key to youth economic opportunities.
• Understanding employment trends is crucial for policy effectiveness.
• Evaluating employment policies can enhance youth job opportunities.

Employment systems and youth development

• The current employment system is failing young people by making it too difficult to dismiss them.

  — Julian Jessop

• Understanding employment rights is crucial for youth development.
• Employment protections may hinder youth learning and responsibility.

• We’re actually doing a disservice to young people by not making it easy to sack them.

  — Julian Jessop

• Addressing employment challenges is key to youth development.
• Evaluating employment systems can enhance youth learning opportunities.

• When it’s easy to sack them, they perhaps have to go home and think about why they got sacked.

  — Julian Jessop

• Understanding employment impacts is crucial for youth opportunities.
• Evaluating employment policies can lead to better youth development strategies.
• Addressing employment system issues is key to youth economic opportunities.
• Understanding employment trends is crucial for policy effectiveness.
• Evaluating employment systems can enhance youth development opportunities.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.