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Economists like Chris Williamson of Markit, have been scratching their heads, trying to explain why the economy has been generating jobs even though it is treading water. "One of the most likely explanations of the so-called 'productivity puzzle' is that companies are either reluctant or unable to make big investments in new plant, machinery and equipment, perhaps due to the uncertain economic outlook or a lack of available finance, or a combination of both," he said. He suggested it is possible companies have taken on more staff -- and that production has become more labor intensive. "If this is the case, it is a worrying sign of deteriorating competitiveness for U.K. plc," he said. As well as trying to come up with growth-enhancing measures, British treasury chief George Osborne will be under pressure to plug a hole in the public finances after an auction of the next generation of mobile phone licenses reaped less than anticipated. Britain's communications regulator said five companies won bids for the 4G spectrum. The auction raised 2.3 billion pounds
-- much less than the 3.5 billion pounds estimated by the Office for Budget Responsibility, the government's tax and spending watchdog. The regulator, Ofcom, said Everything Everywhere, Hutchison 3G U.K., Telefonica U.K., Niche Spectrum Ventures and Vodafone all won spectrum in the auction for the superfast airwaves. Osborne is expected to present his budget next month.
[Associated
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