---
id: "lib-2026-11-05-monetary-policy-report-november-2026-box-c-ai"
type: "library"
title: "Monetary Policy Report November 2026 (Box C AI activity, Box D UK productivity)"
lang: "EN"
org: "Bank of England"
source_type: "Survey"
date: "2026-11-05"
week: "2026-W45"
url: "https://nosov.ai/library/lib-2026-11-05-monetary-policy-report-november-2026-box-c-ai/"
original_url: "https://www.bankofengland.co.uk/monetary-policy-report/2026/november-2026"
tier: "A"
tier_name: "Strong evidence"
tier_reason: "The Bank of England's quarterly Monetary Policy Report brings firm-survey (Decision Maker Panel) estimates and Agents' intelligence on AI's effect on UK productivity, jobs and growth; the AI content is two boxes and leans on firms' own estimates."
summary_basis: "full-text"
original_minutes: "20"
tags: ["future of work", "business transformation", "productivity", "employment"]
frames: ["solow-paradox"]
---

# Monetary Policy Report November 2026 (Box C AI activity, Box D UK productivity)

Tier A (Strong evidence): The Bank of England's quarterly Monetary Policy Report brings firm-survey (Decision Maker Panel) estimates and Agents' intelligence on AI's effect on UK productivity, jobs and growth; the AI content is two boxes and leans on firms' own estimates.

Summary based on the full text.

## In short

The November 2026 Monetary Policy Report covers AI in two boxes. Box C (recent resilience in UK activity) estimates that novel AI-related activity accounts for just under a fifth of UK GDP growth since the start of 2026, but this is upstream production of AI services, not gains from using AI. Box D (UK productivity) finds only a modest AI-driven productivity rise so far: firms put it at about 0.5% over three years with close to zero effect on employment, and expect about 0.9 points a year more over the next three.

## Key numbers

- around 0.5%: productivity gain from AI over the past three years, as estimated by DMP firms
- 0.1-0.2 percentage points: implied AI contribution to annual UK productivity growth since early 2024
- about 0.9 percentage points: expected annual AI boost to productivity growth over the next three years, split between slower employment growth and faster output
- just under a fifth: share of UK GDP growth since the start of 2026 attributed to novel AI-related activity
- around 2.2%: four-quarter GDP growth Bank staff expect in 2026 Q4

## What it reports

- Box C: Bank staff built an AI activity proxy from computer programming and consulting, information services, and publishing (which includes AI agents and application software). Adjusting for the long-run tech trend, novel AI-related activity is just under a fifth of GDP growth since early 2026.
- AI's growth contribution reflects development and implementation of AI rather than broad adoption gains; it boosts demand more than supply so far.
- Business investment grew nearly 5% in the first half of 2026; Agents cite AI-related spending as a driver.
- Box D: most recent productivity strength is cyclical (end of labour hoarding, fewer low-paid jobs after wage-floor and payroll-tax increases).
- DMP firms estimate AI raised productivity about 0.5% over three years, about 0.1-0.2 points a year since early 2024; they report close to zero employment impact.
- Agents' contacts say AI reduces the likelihood of hiring or replacing workers but not of firing them.
- DMP firms expect AI to add about 0.9 points a year to productivity growth over the next three years, roughly half through slower employment growth and half through faster output.

## How they got it

ONS output and jobs data, a staff-built sector proxy for AI activity, the Decision Maker Panel survey of UK firms, and qualitative reports from the Bank's regional Agents. The central projection assumes trend productivity growth of 1%.

## Limits

- The AI activity proxy covers whole sectors, so it overstates AI output unless the trend adjustment is right; the Bank says the precise contribution is hard to quantify.
- Productivity and employment effects are firms' own estimates, not measured outcomes.
- AI is a small part of a report mainly about inflation and the energy shock.

## Why it matters for companies

A central bank now says, in its main policy document, that AI is lifting UK demand through building AI, while productivity gains from using it are still small. Firms' expected path, half the gain through slower hiring, matches the vacancy data from Australia and the US: adjustment arrives through roles not filled. Workforce planners should model attrition and hiring freezes rather than layoffs, and expect regulators to watch hiring data closely.

Original: https://www.bankofengland.co.uk/monetary-policy-report/2026/november-2026