Bank of England finds only a modest AI productivity lift so far, but firms expect more

The Bank of England's November 2026 Monetary Policy Report, published on November 5, takes a measured view of what artificial intelligence has done for UK productivity so far. Drawing on its Decision Maker Panel (DMP), a regular survey of UK businesses, the Bank reports that firms estimate AI has lifted their productivity by around 0.5% over the past three years. The Bank translates that into roughly 0.1 to 0.2 percentage points of extra annual productivity growth since early 2024.

Survey figures, not hard data

The figures come from what companies say about themselves rather than from official statistics, and the report flags that uncertainty about the size and timing of AI's effect "remains large". Productivity growth has picked up in AI-exposed sectors such as information and communication, the Bank notes, but it has not climbed above pre-pandemic averages there.

Looking ahead, firms are more optimistic. On average they expect AI to raise productivity growth by about 0.9 percentage points per year over the next three years. According to the report, that gain would come in roughly equal parts from slower employment growth and from faster output growth.

On jobs, DMP respondents report close to zero impact from AI so far. Business contacts of the Bank's Agents say AI is making firms less likely to hire or to replace departing staff, without materially increasing dismissals.

Demand first, productivity later

The report's analysis of recent growth points in the same direction. Using a proxy built from publishing, computer programming and consulting, and information services, Bank staff estimate that novel AI-related activity, after stripping out longer-run tech trends, accounts for just under a fifth of UK GDP growth since the start of 2026. That contribution appears to come from firms developing and implementing AI rather than from wider adoption, so for now the Bank reads the rollout mainly as a boost to demand.

Much of the recent productivity strength, the report says, is cyclical: firms unwinding earlier labour hoarding and reacting to higher labour costs. The Bank still lists AI as the one candidate explanation likely to produce a structural, lasting rise in productivity growth, and says it will review its trend productivity assumption of 1% a year, including after new industry-level ONS data due in February.

The Register, which covered the report on November 6, framed it as cold water on hopes of an AI productivity boom. The same report accompanied an 8–1 vote by the Monetary Policy Committee to raise Bank Rate by 0.25 percentage points to 4%, with one member preferring a larger rise.