Bank of England finds AI lifting UK productivity as vacancies fall

British firms developing and using AI are becoming more productive, with gains most visible in software, IT consulting, information services, office administration and business services, according to Bank of England analysis.

Software and IT consulting firms contributed 0.1 percentage point to annual productivity growth in 2023-2025, a tenfold increase compared with the decade before the Covid-19 pandemic. Information-service providers also moved from being a drag on productivity to a source of growth, while firms adopting AI are finding opportunities to automate repetitive work such as scheduling meetings and processing invoices.

The productivity gains are arriving alongside weaker demand for some workers. Vacancies for jobs most exposed to AI fell by 15 per cent over the past three years, compared with declines of 10 per cent for medium-exposure occupations and 6 per cent for low-exposure roles. Customer service and administrative positions saw the steepest drops, with vacancies down by more than 20 per cent.

Bank of England governor Andrew Bailey has said AI could help lift the UK out of a prolonged period of weak growth, though its productivity impact may follow a J-curve as businesses learn how to use the technology effectively.