Businesses across Britain are starting to see real productivity gains as artificial intelligence becomes more widely adopted. Accountancy firms like Moore Kingston Smith report that tasks that once took two weeks, such as fraud checks, can now be completed in just two hours using AI tools based on Google’s Gemini 2.5 models. In teams where AI use is highest, profit margins have risen by 8 percentage points. With services accounting for 80% of the UK economy, experts say the country is well-positioned to benefit from AI early, particularly in finance, accountancy, legal services and consulting. The gains come at a crucial time, with slow growth, low investment, high inflation and potential budget-tightening measures by Finance Minister Rachel Reeves.
Britain has faced nearly 20 years of stagnant productivity since the 2007-08 financial crisis, affecting wages and fuelling public frustration. AI offers a chance to reverse this trend without major public spending. Early corporate results show AI can streamline labour-heavy tasks, expand capacity without adding staff and improve decision-making in high-value service sectors. If adoption scales, AI could help offset underinvestment in physical industries, improve competitiveness and support long-term wage growth. However, challenges such as regulatory uncertainty, job displacement and inequality remain.
Service-oriented companies including accountants, law firms, consultancies, banks and design agencies stand to gain the most from AI, while manufacturers like Amtico may see slower progress and focus more on robotics. Policymakers including Prime Minister Keir Starmer and Finance Minister Reeves view productivity improvements as essential for public finance stability. Regulators face pressure to update rules quickly to keep pace with AI, while workers may see opportunities for higher-skilled roles alongside short-term job reductions, with some firms already adjusting graduate hiring.
Economists predict AI will gradually add 0.1 to 0.2% points to annual growth in the coming years, with larger impacts possible in the 2030s as adoption widens. Fiscal decisions in the upcoming budget will influence business investment and innovation capacity. Firms are expected to expand AI use across departments, moving away from manual, document-heavy work. While AI cannot fix Britain’s economic model alone, it offers a rare chance for meaningful productivity growth if policymakers and businesses act quickly.
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