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Artificial intelligence is leading to more job losses in the UK than in other major economies, according to new research by investment bank Morgan Stanley.
The study found that British companies reported an 8% net decline in jobs linked to AI over the past year — the highest among large economies such as the United States, Japan, Germany and Australia. While AI has improved productivity, it has not created enough new roles in the UK to offset job cuts.
The research surveyed companies that have used AI for at least a year across five sectors, including retail, real estate, transport, healthcare equipment and the automotive industry. UK firms reported an average productivity boost of 11.5% from AI, similar to gains seen in the US. However, unlike the UK, US companies created more jobs than they eliminated.
The findings suggest UK workers are facing greater pressure from AI, alongside rising business costs and higher taxes. Unemployment in Britain is now at a four-year high, as increases in the minimum wage and employer national insurance contributions have slowed hiring.
Concern among workers is growing. A separate survey by recruitment firm Randstad found that more than one in four UK workers fear their jobs could disappear within five years because of AI. Younger workers, particularly those from Generation Z, expressed the greatest anxiety, while older workers nearing retirement felt more confident about adapting.
Morgan Stanley’s research also showed companies are most likely to cut early-career roles requiring two to five years of experience.
Earlier this month, London mayor Sadiq Khan warned that AI could lead to widespread job losses in the capital, especially in finance, creative industries and professional services. He said urgent action is needed to ensure new jobs replace those lost to technology.
At the World Economic Forum in Davos, JP Morgan chief executive Jamie Dimon echoed similar concerns, warning that governments and businesses must support displaced workers or risk social unrest.
