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AI Could Replace Up to Three Million UK Jobs, But Boost Economy in the Long Run

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Artificial intelligence (AI) could ultimately displace between one and three million jobs across the UK, according to a new report by the Tony Blair Institute for Global Change. The study suggests that AI-driven changes to the labor market could gradually increase unemployment, with annual job losses expected to peak between 60,000 and 275,000 as AI technology becomes more widely integrated across various industries.

The report, titled Impact of AI on the Labour Market, projects that despite these displacements, AI will ultimately create new demands and opportunities for workers. “Our best guess is that AI’s peak impact on unemployment is likely to be in the low hundreds of thousands,” the report states, noting that while some jobs may be eliminated, these effects will “be capped and ultimately offset” over time as the economy adjusts and new job categories emerge.

The report indicates that AI is particularly likely to affect fields that rely on cognitive tasks, such as administration, sales, customer service, and data-intensive roles in sectors like finance and banking. The gradual adoption of AI is expected to streamline operations, potentially reducing the need for human labor in these areas.

However, AI’s economic impact could be substantial, with the study estimating it could ultimately grow the UK economy by up to 14% by 2050. In the short term, AI adoption is expected to have a “relatively modest” effect, potentially boosting GDP by around 1% within the next five years, with a predicted rise in unemployment by as much as 180,000 by 2030. In the long term, labor productivity and time savings are expected to contribute to broader economic growth, especially as companies find ways to use AI to reduce costs and improve efficiency.

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According to the study, large-scale AI adoption could allow firms to save roughly a quarter of private-sector workforce time, representing the equivalent productivity of six million workers. London, already a major hub for generative AI, holds 30% of Europe’s AI startups, underscoring the UK’s leadership in this growing sector, as highlighted by a June study from venture capital firms Accel and Dealroom.

The report also suggests that the benefits of AI are likely to reach smaller businesses if larger AI companies can develop scalable, cost-effective solutions that smaller enterprises can affordably implement. In addition, AI has the potential to improve the labor supply by enhancing workforce productivity and reducing time lost to health issues or job mismatches.

For AI’s transition to succeed, the study emphasizes the need for government involvement. The researchers recommend that governments proactively provide workers with training and information about workplace changes driven by AI, along with financial safety nets and retraining programs to maximize employment opportunities. The report also calls for contingency plans to address any disruptions if job losses and AI integration prove more challenging than expected.

While AI may lead to significant job transformations, the report sees it as a powerful tool for growth, with the potential to revolutionize productivity and economic output if carefully managed and widely adopted.

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EU Proposes Carbon Charges for More International Flights Under ETS Overhaul

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The European Commission has proposed expanding the European Union’s carbon market to cover more international flights arriving in Europe, bringing thousands of routes under emissions trading from 2029 as part of a wider overhaul of the bloc’s Emissions Trading System (ETS).

Under the proposal announced on Friday, flights arriving in Europe from destinations within 5,000 kilometres would be required to pay for their carbon dioxide emissions. Routes such as Frankfurt to Dubai and Frankfurt to Istanbul would fall under the scheme, while longer journeys including Frankfurt to Tokyo would remain outside its scope. Flights arriving from the United States and China would also be exempt.

The proposal keeps existing exemptions for domestic flights serving the EU’s outermost regions, including connections between mainland Spain and the Canary Islands, until the end of 2035.

European officials said the changes are intended to create fairer competition for EU airlines, arguing that some non-EU carriers, particularly those operating through Gulf hubs, currently benefit from an uneven regulatory environment.

Climate Commissioner Wopke Hoekstra said aviation remains the only major sector where emissions continue to increase. He added that extending the ETS would help address competitive concerns while supporting the EU’s climate objectives. Hoekstra also confirmed that private jets departing from and arriving in Europe would be covered under the revised rules.

The Commission is legally required to assess whether international aviation should face broader carbon pricing beyond flights operating within the European Economic Area. The current ETS has covered intra-European flights since 2012, while most international aviation emissions are managed through the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

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EU officials said that if international efforts fail to deliver sufficient emissions reductions by 2032, Brussels may be required to propose extending the ETS to all departing international flights from Europe, although they acknowledged such a move would be politically challenging.

The revised package also proposes significant changes for industrial companies receiving free carbon allowances. Under the plan, firms would receive 80% of their free allocations after publishing board-approved decarbonisation investment plans, while the remaining 20% would only be released after those investments and emissions reductions have been completed.

Commission officials said the approach is designed to encourage investment in cleaner technologies while maintaining Europe’s industrial competitiveness. They also want at least half of national ETS revenues to be reinvested in sectors covered by the carbon market, including aviation, maritime transport and energy-intensive industries.

The proposal has drawn mixed reactions. German lawmaker Peter Liese called for additional free allowances tied to investments within Europe to protect jobs during the transition. Meanwhile, environmental group Transport & Environment warned against weakening the ETS, arguing that the carbon market has already helped cut emissions substantially since 2005 and remains essential for financing future clean technologies.

The proposal will now move to the European Parliament and EU member states, with negotiations expected to begin after the summer break.

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Iran Claims Strikes on US Bases as Hormuz Tensions Escalate

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Iran’s Revolutionary Guards Corps (IRGC) said early Wednesday it had launched attacks against US military facilities in Bahrain and Kuwait, marking another escalation in the conflict as the United States continued military operations against Iran and renewed restrictions on Iranian shipping in the Strait of Hormuz.

The IRGC said it targeted the US Fifth Fleet’s command-and-control facilities, logistical centres, petroleum installations and military equipment in Bahrain, along with a US base in Kuwait. Iranian state media described the strikes as retaliation for recent American military operations and efforts to control maritime traffic through the Strait of Hormuz.

In a statement carried by local media, the IRGC warned that if Washington continued trying to restrict regional oil and gas exports by controlling key shipping routes, Iran would seek to disrupt other energy corridors serving US and allied interests. The statement declared that regional energy exports would be “for everyone or for no one,” although it did not specify which routes could be targeted.

Missile warning systems were activated in Bahrain and Kuwait as Iranian projectiles approached. Jordanian authorities said their air defence systems intercepted three incoming Iranian missiles, while Kuwait’s military reported repelling Iranian drone attacks. Iran also claimed it had targeted US military facilities at Jordan’s Azraq Air Base for a second time.

US Navy Admiral Brad Cooper, commander of US Central Command, confirmed that Iran had launched dozens of missiles and drones toward neighbouring Gulf countries.

The latest exchange came after the US military carried out a fourth consecutive night of operations against Iranian targets. According to US Central Command, fighter aircraft, drones and naval vessels conducted a seven-hour mission targeting Iranian missile and drone sites, naval assets and coastal defence systems.

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CENTCOM said the strikes were intended to reduce Iran’s ability to threaten commercial shipping and civilian vessels operating in and around the Strait of Hormuz, a waterway that normally handles around one-fifth of the world’s oil and liquefied natural gas trade.

President Donald Trump also renewed warnings that the United States could expand its campaign if diplomatic efforts fail. In a televised interview with Fox News on Tuesday night, Trump said Washington would eventually target Iran’s energy infrastructure unless Tehran agreed to return to negotiations.

“We’re going to knock out all their power plants. We’re gonna knock out their bridges unless they get to the table and negotiate,” Trump said, adding that energy facilities remained potential targets.

The latest hostilities have cast further doubt over a temporary agreement reached in June after the United States lifted an earlier blockade of Iranian shipping to allow negotiations over Tehran’s nuclear programme. Talks have since stalled as military confrontations around the Strait of Hormuz intensified, raising concerns about regional security and the stability of global energy supplies.

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Cuba Suffers Third Nationwide Blackout in Two Weeks as Fuel Shortages Deepen Energy Crisis

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Cuba was plunged into another nationwide power outage on Tuesday after a failure at a generating unit triggered the collapse of the National Electric System (SEN), marking the third island-wide blackout in less than two weeks as the country struggles with worsening fuel shortages and an ongoing economic crisis.

State-owned Electric Union said the outage began around midday after a malfunction at a power plant in the eastern province of Holguín caused a sudden change in grid frequency, forcing the national electricity network offline.

Officials from the Ministry of Energy and Mines said emergency restoration procedures were activated immediately. The process involves creating isolated “micro-islands” of electricity before reconnecting them to rebuild the national grid. Priority has been given to hospitals, food processing facilities and other essential services.

By Tuesday afternoon, electricity had been restored to parts of Havana, with authorities reporting that about 4 percent of the capital had regained power. Provincial officials in Guantánamo, Cienfuegos and Matanzas also confirmed that electricity had returned to hospitals and selected urban areas, including Matanzas’ historic city centre.

The latest outage follows nationwide blackouts last Monday and Friday that left more than 9 million people without electricity. Cuba also experienced two major nationwide outages in March, along with several regional disruptions during the year.

The repeated failures have disrupted daily life across the island. Public transportation has been severely affected, work schedules have been shortened, flights have faced cancellations and hospitals have struggled to maintain normal operations. Residents have also experienced interruptions to cooking, water supplies, internet access and telephone services.

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Fuel shortages have intensified since January, when US President Donald Trump threatened tariffs on countries supplying or selling oil to Cuba. The measures have added pressure to an economy already facing years of financial hardship.

Cuba currently produces only about 40 percent of the fuel it requires, leaving it heavily dependent on imports. Officials have acknowledged that no immediate solution has emerged to secure additional fuel supplies, leaving the country’s ageing electricity infrastructure under continued strain.

Washington’s energy restrictions followed the capture of Venezuela’s then-President Nicolás Maduro and expanded existing sanctions already affecting Cuba’s economy. Authorities say the latest measures have compounded challenges created by previous sanctions and domestic economic reforms, including monetary unification.

The situation has also drawn political attention in the United States. Four Democratic members of Congress who visited Cuba over the weekend described the energy embargo imposed by the Trump administration as turning the island into a “silent Gaza,” highlighting the humanitarian impact of prolonged power shortages.

With fuel supplies remaining scarce and no immediate relief in sight, Cuba’s electricity system continues to face significant pressure, raising concerns that further nationwide outages could occur in the weeks ahead.

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