Artificial intelligence is helping some UK firms squeeze major productivity gains, sparking hope the country may finally break out of decades-long stagnation. At accounting firm Moore Kingston Smith, an AI-driven fraud-check report once taking two weeks is now completed in two hours.
Services account for around 80 % of Britain’s economy, and economists say the sector stands to benefit most from AI adoption. Moody’s rating agency noted that the UK could outperform many peers because of its services dominance and flexible labour market.
At Moore Kingston Smith (MKS), staff using AI intensively reported profit margins eight percentage points higher than peers. The firm used a Google Gemini-based model to let clients upload full transaction datasets, replacing sampled document checks.
But the benefits are uneven. UK manufacturing, burdened by high costs and low public investment, has struggled to match the AI gains seen in professional services.
In the public sector, the government hopes AI will boost productivity. However, economic forecasts suggest AI may only raise annual growth by 0.1–0.2 percentage points not enough on its own to fix underlying fiscal pressures.
There are risks too: around 17 % of UK private-sector employers expect job cuts within 12 months due to AI, while regulatory uncertainty remains a hurdle for firms halting adoption.
For now, AI-led transformation offers a glimmer of hope for Britain’s sluggish growth. Whether the country can turn that into widespread economic revival remains to be seen.
