LONDON – British firms developing and using artificial intelligence are becoming more productive but gains are coming at the expense of jobs, according to analysis by the Bank of England (BOE).
Software and IT consulting firms increased their contribution to annual productivity growth tenfold compared with the decade before Covid, contributing 0.1 percentage point in 2023-2025, the BOE staff blog post found.
Meanwhile, information-service providers shifted from being a drag to a driver of productivity over that period.
Firms adopting AI are also becoming more productive, the BOE found, particularly in sectors like office administrative and business services, where repetitive tasks like scheduling meetings or processing invoices are ripe for automation.
The report provides some early signs that British firms are finally moving from experimentation to using AI as a driver of growth. So far, the technology has remained elusive in growth statistics, despite rising adoption levels.
BOE Governor Andrew Bailey has said AI’s effect on productivity is likely to follow a J-curve, as businesses take time to learn how to use the technology.
With the UK stuck between technological breakthroughs, he argues that AI has the potential to break the economy out of its prolonged period of weak growth.
However, some of the increase in labour productivity comes at the cost of fewer job opportunities.
A separate BOE blog post found that vacancies in the jobs most exposed to AI fell by 15% over the past three years, compared with declines of 10% for occupations with medium exposure and 6% for low-exposure roles.
Customer service and administrative roles, which are particularly vulnerable to AI, saw the sharpest declines, with vacancies dropping by more than 20%.
“Industries reporting higher AI adoption are also showing tentative signs of improving productivity performance,” wrote Haley Schlicht, an analyst in the BOE’s data and statistics division.
“If AI is genuinely behaving like a general-purpose technology, these productivity and labour-market signals should ultimately be interpreted in coordination rather than in isolation.” BLOOMBERG
