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AI: Jobs, Power & Money
21SEP

OBR shows UK tech productivity jumping

3 min read
16:45UTC

The Office for Budget Responsibility published a new sector table on 28 October: output per worker in information and communication grew 7.6% a year since late 2024.

EconomicAssessed
Key takeaway

Britain's fiscal watchdog finds output per worker accelerating in AI-exposed services but credits AI with little of it.

The Office for Budget Responsibility (OBR), Britain's fiscal watchdog, published a new table on 28 October showing output per worker (the value of what each worker produces, the usual measure of productivity) accelerating in several services that rank high for AI exposure⁠1. In information and communication, output per worker grew 7.6% a year between late 2024 and mid-2026, against 1.3% a year between early 2022 and late 2024. At 7.6% a year output per worker doubles in under ten years; at 1.3% it would take more than fifty. In professional, scientific and technical services it rose to 3.7% from -0.8%, while finance and insurance, also exposed to AI, slowed to 0.3%.

Those are the services the Office for National Statistics (ONS) showed adding jobs while advertising fewer of them, and UK vacancies kept falling in July to September, according to ONS figures published in October. Faster output and fewer advertised posts fit firms meeting demand with tools in place of hires, but the OBR does not claim that. Accommodation and food, hardly an AI sector, also sped up, to 3.2%, and the OBR keeps AI's boost to UK productivity at 0.2 percentage points a year in its central forecast.

Only 30% of UK businesses used any AI technology in September, up from 15% two years earlier, the OBR says. For the public finances, productivity growth 0.5 points a year faster would cut 2030-31 borrowing by about £50bn, and 0.5 points slower would add about £40bn. The OBR built the table from administrative records (data the state already holds) because, it says, limits in the Labour Force Survey make sector trends hard to read; the ONS has pushed its replacement survey beyond November 2027.

Deep Analysis

In plain English

The Office for Budget Responsibility is the UK's official, independent forecaster of the public finances. Its forecasts decide how much the government can borrow under its own rules. Productivity means how much each worker produces. When it rises, wages and tax receipts can rise without people working longer. The OBR published new figures showing workers in tech, telecoms and professional services producing much more than two years ago. Those are jobs where AI tools are widely used. But workers in hotels and restaurants also became more productive, so the OBR does not yet say AI caused the rise.

Deep Analysis
Root Causes

The OBR built the table from administrative records because the Labour Force Survey, the household survey behind UK employment figures, has limits that the OBR says make sector trends hard to read. Without those records the OBR could not have published a sector table at all.

UK productivity has grown slowly since 2008, so the Treasury's borrowing plans are sensitive to small changes in it. That makes any sign of an AI lift, or its absence, a fiscal question as much as an economic one.

Adoption remains narrow. With 30% of firms using any AI technology, most of the economy cannot yet be contributing to an AI productivity gain.

What could happen next?
  • Opportunity

    A sustained productivity lift in AI-exposed sectors would give the Treasury tens of billions of pounds of extra fiscal room by 2030-31.

    Long term · Suggested
  • Meaning

    The UK's fiscal watchdog now has a sector-level series that can test AI's productivity effect each forecast round.

    Short term · Assessed
  • Risk

    If the acceleration proves cyclical, forecasts that lean on it would overstate future tax receipts.

    Medium term · Suggested
First Reported In

Update #22 · Central banks see AI before payrolls do

Office for Budget Responsibility· 6 Nov 2026
Read original →
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.