Artificial intelligence to hit workplace ‘like a freight train’, energy boss warns
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.
“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?”
Business
Tariffs hit US economy forecast but the Fed unmoved by latest Trump threats with no change to interest rates
The US central bank has made no change to interest rates and warned the world’s biggest economy will see less growth and higher inflation due to tariffs.
The Federal Reserve, known as the Fed, held rates despite President Donald Trump calling its chair, Jerome Powell, a “stupid person” on Wednesday.
“Maybe I should go to the Fed. Am I allowed to appoint myself at the Fed? I’d do a much better job than these people,” Mr Trump said.
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Despite appointing Mr Powell himself in 2017, Mr Trump has expressed anger towards the Fed chair at multiple points in the past for not bringing down borrowing costs through interest rate cuts.
In his own address to reporters, Mr Powell declined to hit back.
The tariff effect
But Mr Trump’s signature economic policy of tariffs – taxes on imports – was again forecast to cause higher inflation and lower economic growth in the US.
The Fed’s predictions for inflation were upgraded to 3.1% for 2025 from 2.5% in December, while the outlook for US economic growth was downgraded to 1.4% from 2.1% in December.
The effect of those extra taxes on imports will take time to work its way through the system and show up in prices on shelves, the Fed chair said.
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Trump may strike Iran
An uncertain outlook
While the level of uncertainty peaked in April, when Mr Trump announced many of his tariffs, and has since fallen, it remains elevated, Mr Powell said.
The exact impact of the levies is unclear and depends on the levels they reach, he added.
Many of the country-specific tariffs have been paused for 90 days, which is currently due to end on 8 July.
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Despite this, the economy is in a “solid position”, Mr Powell said.
Interest rates were kept at 4.25%-4.5%. Unlike the UK, the US interest rate is a range to guide lenders rather than a single percentage.
A slowdown in the US economy can have an impact on the UK as the US is its largest trading partner.
On Thursday, it’s the turn of the UK central bank, the Bank of England, to make its latest interest rate determination, with no change also expected.
Inflation eased to an annual rate of 3.4% in May, according to official figures released this morning, but the Bank of England is widely expected to leave interest rates on hold despite that.
The Office for National Statistics (ONS) reported the consumer prices index measure eased from 3.5% the previous month.
It said that despite upwards pressure on prices from food and clothing, the decline was driven by falls in airfare prices following Easter.
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The headline figure also reflected a small downwards correction to ONS inflation data ahead of April related to vehicle excise duty calculations.
ONS acting chief economist Richard Heys said: “A variety of counteracting price movements meant inflation was little changed in May.
FOOD INFLATION AT 15-MONTH HIGH
Today’s headline inflation number suggests a flat picture for price growth overall.
But there is one stat that households will already be familiar with after a visit to the supermarket.
A jump in some food prices has been noticeable, with the ONS flagging a leap in its food and non-alcoholic drinks measure of inflation to a 15-month high.
Why the rise? Chocolate has spiked significantly this year due to a cocoa shortage blamed on poor harvests. Meat, particularly beef, has shot up on high global demand and rising costs.
The food and non-alcoholic drinks category has been on the rise for five months in a row. But the good news is that high rates of sales promotions by chains – discounts – are helping keep a lid on overall grocery bills.
“Air fares fell this month, compared with a large rise at the same time last year, as the timing of Easter and school holidays affected pricing. Meanwhile, motor fuel costs also saw a drop.
“These were partially offset by rising food prices, particularly items such as chocolates and meat products. The cost of furniture and household goods, including fridge freezers and vacuum cleaners, also increased.”
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Businesses facing fresh energy cost threat
Forecasts suggest that inflation will tick up over the second half of the year – with effects from Donald Trump’s trade war and rising commodity costs amid events in the Middle East among the concerns ahead for the Bank of England.
It has adopted a “careful” and “gradual” approach to interest rate cuts as a result.
That is despite weakening employment data, reported earlier this month, which showed a tick up in the official jobless rate and a 109,000 reduction in payrolled employment.
Other elements of the inflation data are also supportive of an argument for rate cuts.
Core CPI inflation – a measure that strips out volatile elements such as energy and food – eased from 3.8% in April to 3.5% while services inflation tumbled sharply to 4.7% from 5.4% the previous month.
Nevertheless, the Bank is widely expected to leave Bank rate on hold on Thursday following the June meeting of its rate-setting committee.
LSEG data showed after the inflation data that financial markets currently see two more interest rate cuts by the year’s end.
Risks to prices ahead will come from a sustained Israel-Iran war pushing up oil and gas prices but there have been different views among policymakers over whether the trade war will result in inflation or not.
As such, the minutes of the Bank’s meeting will be closely scrutinised for hints on whether rate cut caution is easing.
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