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The government must act to prepare for artificial intelligence (AI) to hit the workplace “like a freight train”, the boss of one of Britain’s leading energy companies has told Sky News.

Greg Jackson, founder of Octopus, says the adoption of AI across industry will ultimately improve the workplace and spawn new roles, but the startling pace of development means millions of jobs could be at risk in the short-term.

Octopus has seen huge benefits from the adoption of generative artificial intelligence in its customer service operations, with 44% of customer emails being answered, at least in part, by AI just seven weeks after it was rolled out.

Human employees still manage and check all the AI’s output, and Mr Jackson said it would not cost any jobs at Octopus.

He warned however, that the technology posed a threat to jobs at companies looking to cut costs, and business, regulators and politicians need to prepare for a rapid transition.

“Around the world, governments are quite quickly beginning to think about what they have to do but we haven’t got time to wait and see,” he said. “If a freight train is coming at you don’t wait to feel it hit before moving out the way.

“In growing companies, ones that are expanding and innovating in new areas, AI lets us do that faster, better for customers, and in our case hopefully better for the planet.

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“But I think in companies that are not growing and don’t have the same opportunity to expand into new areas it could be a cost-cutting exercise in which case the threat to jobs is very real.”

“Right now we can see some of these impacts and I think responsible companies should be opening up this discussion so we can help governments think about how to handle it. And I think the first thing we need to think about is this economic dislocation and the risk to jobs.”

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More than 1,000 artificial intelligence experts have joined calls for a temporary halt on the creation of giant AI

Mr Jackson’s warning comes as BT announced it will replace around 10,000 workers with advanced AI in the next seven years, making it the largest British company to make a direct link between the new technology and job losses.

The debate around AI has gained urgency in recent months with the emergence of new generative AI models such as ChatGPT and Midjourney, which can produce sophisticated written content and imagery based on a few text prompts.

The advances have surprised even developers, raising the prospect of a genuine industrial revolution in white-collar work, with the promise of productivity gains accompanied by fears of huge job losses.

While it’s not clear where the balance between promise and pain will eventually fall, companies are accelerating their use of the technology.

Workplace adoption

Allen & Overy, one the “magic circle” of major London-based law firms, began trialling a bespoke AI tool called Harvey last November which is now being used by 3,500 lawyers in 43 jurisdictions across the business.

Lawyers use it to generate a draft document or examine an area of law, which is then checked and finessed before being used, delivering productivity gains worth one or two hours a week, per person.

“It’s saving thousands of hours across a large organisation,” said David Wakeling, who has led the project for Allen & Overy.

“It’s a boring productivity gain, really, it’s an hour or two a week, but when you multiply that by three and a half thousand, that is a big deal for a business. It was impossible to find these productivity gains through a single deployment of a system.”

He said the technology was constantly surprising employees with its ability, but does not pose a threat to human workers.

“We see it as augmenting our lawyers, not replacing them… it is a brilliant productivity gain for some efficiency savings but the technology I’m seeing today, I’m aware that people talk about this [job losses] all the time, but we are using cutting edge technology and we are not seeing that impact today.

“We underestimate its capabilities all the time. Someone will send an email saying, I just got the most amazing answer or I just found this use-case, it still happens a lot.

“It’s still limited, it still has the risk of errors, we still have to concentrate on making sure it’s safely deployed and people understand that you need the expert in the loop. But fundamentally, it’s an amazing machine and it produces surprises all the time.”

Concern for workers’ rights

While employers search for opportunities in AI, unions are concerned at its potential to erode workers’ rights and are calling for tighter regulation.

The government wants the UK to be a world leader in AI, and in a recent white paper said it would not legislate to deal with AI, preferring to allow existing regulators to work with companies on appropriate rules.

The TUC says workers are already under-represented in the rollout of new technology and is calling for legislation to protect humans from hiring and firing by algorithm.

“Our research has found that unfortunately, there’s a very low level of consultation at work about the introduction of new technologies, and indeed, sometimes technologies are operating and making decisions about people who don’t even know that that’s happening,” said Mary Towers, the TUC’s lead on AI.

“We say that at the very moment at which regulation is most needed, when the technologies are developing so rapidly and the implications are so significant, instead of regulating, the government is putting forward flimsy and vague proposals that don’t have any statutory footing.

“There’s potential for everyone to benefit from the innovation and from the development of AI-powered technology, but the critical issue is, are lots of different voices represented at the development stage of the technology?”

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Economists say the cost of living crisis is over – here’s why many households disagree

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Economists say the cost of living crisis is over - here's why many households disagree

Talk to economists and they will tell you that the cost of living crisis is over.

They will point towards charts showing that while inflation is still above the Bank of England’s 2% target, it has come down considerably in recent years, and is now “only” hovering between 3% and 4%.

So why does the cost of living still feel like such a pressing issue for so many households? The short answer is because, depending on how you define it, it never ended.

Economists like to focus on the change in prices over the past year, and certainly on that measure inflation is down sharply, from double-digit levels in recent years.

But if you look over the past four years then the rate of change is at its highest since the early 1990s.

But even that understates the complexity of economic circumstances facing households around the country.

For if you want a sense of how current financial conditions really feel in people’s pockets, you really ought to offset inflation against wages, and then also take account of the impact of taxes.

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That is a complex exercise – in part because no two households’ experience is alike.

But recent research from the Resolution Foundation illustrates some of the dynamics going on beneath the surface, and underlines that for many households the cost of living crisis is still very real indeed.

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UK inflation slows to 3.4%

The place to begin here is to recall that perhaps the best measure of economic “feelgood factor” is to subtract inflation and taxes from people’s nominal pay.

You end up with a statistic showing your real household disposable income.

Consider the projected pattern over the coming years. For a household earning £50,000, earnings are expected to increase by 10% between 2024/25 and 2027/28.

Subtract inflation projected over that period and all of a sudden that 10% drops to 2.5%.

Now subtract the real increase in payments of National Insurance and taxes and it’s down to 0.2%.

Now subtract projected council tax increases and all of a sudden what began as a 10% increase is actually a 0.1% decrease.

Read more:
UK economy figures ‘not as bad as they look’, analysts say
More options than ever for savers to beat inflation

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Will we see tax rises in next budget?

Of course, the degree of change in your circumstances can differ depending on all sorts of factors. Some earners (especially those close to tax thresholds, which in this case includes those on £50,000) feel the impact of tax changes more than others.

Pensioners and those who own their homes outright benefit from a comparatively lower increase in housing costs in the coming years than those paying mortgages and (especially) rent.

Nor is everyone’s experience of inflation the same. In general, lower-income households pay considerably more of their earnings on essentials, like housing costs, food and energy. Some of those costs are going up rapidly – indeed, the UK faces higher power costs than any other developed economy.

But the ultimate verdict provides some clear patterns. Pensioners can expect further increases in their take-home pay in the coming years. Those who own their homes outright and with mortgages can likely expect earnings to outpace extra costs. But others are less fortunate. Those who rent their homes privately are projected to see sharp falls in their household income – and children are likely to see further falls in their economic welfare too.

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Lloyds Banking Group in talks to buy digital wallet provider Curve

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Lloyds Banking Group in talks to buy digital wallet provider Curve

Britain’s biggest high street bank is in talks to buy Curve, the digital wallet provider, amid growing regulatory pressure on Apple to open its payment services to rivals.

Sky News has learnt that Lloyds Banking Group is in advanced discussions to acquire Curve for a price believed to be up to £120m.

City sources said this weekend that if the negotiations were successfully concluded, a deal could be announced by the end of September.

Curve was founded by Shachar Bialick, a former Israeli special forces soldier, in 2016.

Three years later, he told an interviewer: “In 10 years time we are going to be IPOed [listed on the public equity markets]… and hopefully worth around $50bn to $60bn.”

One insider said this weekend that Curve was being advised by KBW, part of the investment bank Stifel, on the discussions with Lloyds.

If a mooted price range of £100m-£120m turns out to be accurate, that would represent a lower valuation than the £133m Curve raised in its Series C funding round, which concluded in 2023.

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That round included backing from Britannia, IDC Ventures, Cercano Management – the venture arm of Microsoft co-founder Paul Allen’s estate – and Outward VC.

It was also reported to have raised more than £40m last year, while reducing employee numbers and suspending its US expansion.

In total, the company has raised more than £200m in equity since it was founded.

Curve has been positioned as a rival to Apple Pay in recent years, having initially launched as an app enabling consumers to combine their debit and credit cards in a single wallet.

One source close to the prospective deal said that Lloyds had identified Curve as a strategically attractive bid target as it pushes deeper into payments infrastructure under chief executive Charlie Nunn.

Lloyds is also said to believe that Curve would be a financially rational asset to own because of the fees Apple charges consumers to use its Apple Pay service.

In March, the Financial Conduct Authority and Payment Systems Regulator began working with the Competition and Markets Authority to examine the implications of the growth of digital wallets owned by Apple and Google.

Lloyds owns stakes in a number of fintechs, including the banking-as-a-service platform ThoughtMachine, but has set expanding its tech capabilities as a key strategic objective.

The group employs more than 70,000 people and operates more than 750 branches across Britain.

Curve is chaired by Lord Fink, the former Man Group chief executive who has become a prolific investor in British technology start-ups.

When he was appointed to the role in January, he said: “Working alongside Curve as an investor, I have had a ringside seat to the company’s unassailable and well-earned rise.

“Beginning as a card which combines all your cards into one, to the all-encompassing digital wallet it has evolved into, Curve offers a transformative financial management experience to its users.

“I am proud to have been part of the journey so far, and welcome the chance to support the company through its next, very significant period of growth.”

IDC Ventures, one of the investors in Curve’s Series C funding round, said at the time of its last major fundraising: “Thanks to their unique technology…they have the capability to intercept the transaction and supercharge the customer experience, with its Double Dip Rewards, [and] eliminating nasty hidden fees.

“And they do it seamlessly, without any need for the customer to change the cards they pay with.”

News of the talks between Lloyds and Curve comes days before Rachel Reeves, the chancellor, is expected to outline plans to bolster Britain’s fintech sector by endorsing a concierge service to match start-ups with investors.

Lord Fink declined to comment when contacted by Sky News on Saturday morning, while Curve did not respond to an enquiry sent by email.

Lloyds also declined to comment, while Stifel KBW could not be reached for comment.

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UK economy figures not as bad as they look despite GDP fall, analysts say

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UK economy figures not as bad as they look despite GDP fall, analysts say

The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.

A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).

Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.

It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.

A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.

This was borne out by other figures released by the ONS on Friday.

Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.

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Overall, there was a “large rise in goods imports and a fall in goods exports”.

A ‘disappointing’ but mixed picture

It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.

“I am determined to kickstart economic growth and deliver on that promise”, she added.

But the picture was not all bad.

Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.

It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.

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The expansion in March means the economy still grew when the three months are looked at together.

While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.

Such a cut would bring down the rate to 4% and make borrowing cheaper.

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Is Britain going bankrupt?

Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.

“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.

Why did the economy shrink?

The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.

The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.

It made up for a “very weak” month for retailers, the ONS said.

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