The UK is losing more jobs than it is creating as a result of artificial intelligence, according to new research that suggests Britain is being affected more severely than other large economies by the technology's rapid adoption.
A study by investment bank Morgan Stanley found that British companies using AI reported a net 8% decline in jobs over the past 12 months, the highest rate among countries surveyed, including the United States, Germany, Japan and Australia. The research examined firms across five sectors, including retail, transport, healthcare equipment and automotive industries.
While UK businesses reported an average productivity increase of 11.5% driven by AI, similar to gains seen in the US, the employment impact differed sharply. American firms, the study found, were more likely to create jobs alongside efficiency gains, whereas UK companies cut more roles than they added.
The findings come as the UK labour market faces mounting pressure from higher costs, including rises in the minimum wage and increased employer national insurance contributions. Unemployment has reached a four-year high, adding to concerns that AI is accelerating job losses rather than supporting workforce growth.
The research also suggests that early-career roles are particularly vulnerable, with companies most likely to reduce positions requiring two to five years of experience. Separate surveys show growing anxiety among workers, especially younger employees, about whether they will be able to adapt as AI reshapes the job market in the coming years.