Bank of England Reports AI Boosts UK Productivity Amid Job Losses

The Bank of England reports that British firms adopting artificial intelligence are experiencing productivity gains, most notably within the business services, software, and IT consulting sectors. Software and IT consulting firms saw their contribution to annual productivity growth increase tenfold compared to the pre-pandemic decade, adding 0.1 percentage point between 2023 and 2025.

These productivity increases are occurring alongside a contraction in the labor market. Vacancies in roles with high AI exposure decreased by 15% over the last three years, with administrative and customer service roles seeing the sharpest decline of more than 20%.

Bank of England Governor Andrew Bailey suggests that AI's impact on productivity will likely follow a J-curve as businesses adapt. He argues this shift could potentially end the United Kingdom's prolonged period of weak economic growth. Haley Schlicht of the bank's data and statistics division noted that industries reporting higher AI adoption are showing tentative signs of improving productivity performance.