AI could boost UK economy but Labour government may miss out

AI could boost UK economy but Labour government may miss out

Office for Budget Responsibility warns artificial intelligence could raise productivity but benefits may arrive beyond current fiscal forecasts. Artificial Intelligence (AI) could provide a substantial lift to the UK economy, analysts suggest, yet its benefits are expected to arrive too late to improve growth rates within the current Labour government’s parliamentary term. The Office for Budget Responsibility (OBR), the country’s independent fiscal watchdog, released new analysis highlighting both the potential and the uncertainty surrounding AI’s impact on productivity and public finances. The OBR estimates that AI could contribute as much as 0.8 percentage points to productivity growth over the next decade, a shift that would significantly strengthen the UK’s fiscal position. However, it cautioned that most of these gains are likely to materialize in the second half of the 2030s, meaning they fall outside current government forecasts and beyond the next general election cycle. Within t…