The Bank of England has put a number on how much AI has helped British businesses so far: about 0.5% extra productivity over three years, according to firms' own estimates. Published on 5 November 2026 in the Bank's quarterly Monetary Policy Report, the finding suggests the effect of AI on the economy is real but modest, and that its effect on jobs shows up as slower hiring rather than layoffs.
What the Bank found
- Productivity: Firms in the Bank's Decision Maker Panel survey estimate that AI has raised their productivity by around 0.5% over the past three years. The Bank reads this as adding roughly 0.1 to 0.2 percentage points a year to UK productivity growth since early 2024.
- Sectors: Productivity growth has improved in AI-exposed sectors such as information and communications, but has not exceeded its pre-pandemic average, according to The Register's summary.
- Growth: AI-related activity accounts for just under a fifth of UK GDP growth since the start of 2026, and business investment grew by nearly 5% in the first half of the year. The Bank says most of this comes from companies building and deploying AI, not from businesses becoming more efficient by using it.
- Jobs: Surveyed firms report close to zero effect on employment so far. The Bank's regional Agents say AI adoption is making firms less likely to hire or replace workers, but not materially more likely to fire them.
The forecast is more optimistic
Firms expect AI to add about 0.9 percentage points a year to productivity growth over the next three years, with the gains split roughly equally between faster output growth and slower employment growth. The Bank treats that as an upside risk, not a certainty.
Reasons for caution
The Bank cautioned against giving AI too much credit for Britain's recent productivity pickup. It attributes most of it to other causes, such as firms shedding workers they had hoarded during 2022 and 2023, and higher labour costs that cut low-paid jobs. Both of those also reduce hiring and raise measured productivity, which can look like an AI effect when it is not. The productivity and employment figures are firms' own estimates, not measured outcomes, and the survey is limited to one country.
The wider backdrop
The report came alongside the Bank's 8–1 vote to raise Bank Rate by a quarter of a percentage point to 4%, according to ResultSense. The Bank noted only limited evidence so far of knock-on effects on wages and prices from AI.
Why it matters
The finding lands in the same week that US AI shares fell sharply over doubts about the return on huge spending. It does not prove that AI will fail to deliver, since the Bank's own survey expects bigger gains ahead, but it supports the view that the benefits take time to show up in the economy. For workers, it also suggests the early labour-market effect is felt by people looking for jobs, such as graduates and career-changers, more than by people already in them. That echoes what other studies have found, including Anthropic's report on junior hiring in October.
Sources: Bank of England Monetary Policy Report, November 2026 (5 November), as reported by The Register, PPC Land, ResultSense, IndexBox and the Generative AI Living Review.
