Could AI finally solve the UK productivity problem?

CREATED BY ROGER EDDOWES Published: 03/09/2026 @ 09:01AM #UKproductivity #economicheadache #financialcrisis #slowprogress #productivitygrowth

For years, UK productivity has been something of an economic headache. Before the financial crisis in 2008, productivity was growing at a much healthier rate, but progress since then has been disappointingly slow ...

Could AI be the solution to the long-standing issue of UK productivity?

Governments of every colour have repeatedly talked about improving growth, yet finding a way to make that happen has proved considerably harder. I think artificial intelligence could finally provide part of the answer.

There are good reasons to believe AI could make
a meaningful difference to UK productivity!

Britain has a large service-based economy, with sectors such as finance, professional services, technology and pharmaceuticals particularly well placed to benefit. AI can already handle repetitive administrative tasks, analyse information quickly, and help people complete certain tasks in a fraction of the time they once took.

Interestingly, there are signs that productivity has started to improve slightly. At the same time, employment numbers have weakened, suggesting businesses are producing more without necessarily hiring more people. Some economists believe that the growing use of AI is already contributing to this.

I think UK productivity could improve considerably as businesses move beyond simply experimenting with AI. There is a big difference between occasionally asking ChatGPT to write an email and actually examining how AI could improve business processes.

However, I don't believe we should give AI all the credit just yet. Businesses have also faced higher employment costs, including increases in National Insurance and the minimum wage. That has encouraged some employers to reduce recruitment or operate with smaller teams. Producing the same output with fewer employees improves productivity on paper, regardless of whether AI was involved.

Don't forget the public sector!

Healthcare, local government and other public services deal with enormous amounts of routine administration and straightforward enquiries. I feel this is an area where carefully implemented AI could make a significant difference.

Rather than replacing the people delivering those services, AI could take away some of the repetitive workload and allow staff to concentrate on situations where human experience, judgement and empathy are genuinely required.

Of course, AI isn't going to transform the economy overnight. Businesses and organisations need time to understand the technology, employees need the right skills, and organisations need to determine where AI genuinely saves time rather than adopting it simply because everyone else is doing so.

Nevertheless, I believe improving productivity is one of the strongest arguments for embracing artificial intelligence; just remember to do it in the right way.

If we use the technology to help people accomplish more, rather than simply viewing it as a way to employ fewer people, it could contribute to stronger businesses, better public services and ultimately a healthier economy.

Perhaps, after years of searching for the productivity breakthrough Britain needs, we finally have a tool capable of delivering it.

Until next time ...

ROGER EDDOWES
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

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