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The research was commissioned to enhance understanding of what is driving national productivity and in particular what might explain the gap between the UK and some of its international competitors. Previous work has suggested that the productivity gap has a strong sectoral and spatial dimension and it was important to enhance understanding of this. This report analyses differences in labour productivity - defined as output per person in employment - between the countries and regions of the UK over the period 1992-2002. The study was intended to explore the variations in productivity across the UK and in particular to shed more light on the contribution that the sectoral distribution of employment makes to spatial productivity differences.