📉Bank of England Says AI Added 0.5% to UK Productivity Over Three Years

AI's productivity boost is real but small, and it's mostly layoffs

The Bank of England says AI has lifted UK productivity by roughly 0.5% over the past three years. That's real, but it's a rounding error next to the hype. Most of the gain looks like companies hiring fewer people while output keeps climbing, not AI making individual workers dramatically faster. Why should you care? If you're building or selling AI features, the buyer's question is shifting from 'does it work' to 'what did it cut.' Gartner found 3 percent of organizations actually hit their AI targets, even though 75 percent of board members expected productivity gains. The gap between the pitch and the P&L is where your next renewal fight happens. The numbers: the estimated boost equals 0.1 to 0.2 percentage points of extra annual productivity growth since early 2024. AI-related activity accounted for just under a fifth of UK GDP growth since the start of 2026. Businesses still expect around 0.9 points of annual productivity growth over the next three years, so the optimism hasn't died. The IMF and the Bank for International Settlements are warning that AI spending could turn into a dotcom-style bust if profits don't follow.