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AI Could Replace Up to Three Million UK Jobs, But Boost Economy in the Long Run
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.
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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Russia Demands SWIFT Reconnection as Condition to Revive Black Sea Initiative
Russia has set forth a key demand for the restoration of the Black Sea Initiative—reconnecting its Agricultural Bank, Rosselkhozbank, to the SWIFT financial system. This request, which falls under the jurisdiction of the European Union (EU), comes amid ongoing negotiations between global powers on the war in Ukraine.
Partial Ceasefire and Black Sea Security Agreement
Following recent talks in Saudi Arabia, the United States announced that Russia and Ukraine had agreed to a partial ceasefire specifically covering energy facilities. While this fell short of the broader ceasefire pushed by former President Donald Trump, the parties also agreed on measures to ensure the safe navigation of commercial vessels in the Black Sea and to prevent their use for military purposes.
However, the Kremlin quickly detailed additional conditions, demanding the lifting of sanctions on food exports, fertilizers, agricultural machinery, and cargo insurance. Most notably, Russia is insisting that Rosselkhozbank and other financial institutions involved in agricultural trade be reinstated on SWIFT, a global messaging system that facilitates secure financial transactions.
EU’s Role and Sanctions History
SWIFT, headquartered in Belgium, falls under EU regulations. In response to Russia’s invasion of Ukraine, the EU removed several Russian banks from SWIFT in 2022, including Sberbank, Credit Bank of Moscow, and Rosselkhozbank. The exclusion was a significant blow to Russia’s financial system, as it restricted the country’s ability to conduct international transactions.
Rosselkhozbank, a state-owned institution, plays a critical role in facilitating payments for Russia’s agricultural exports, a major revenue source through the global sale of wheat, barley, and corn. While the EU has not directly sanctioned Russian agricultural exports, the banking restrictions have complicated payments for these transactions, leading to the collapse of the initial Black Sea Initiative brokered by Turkey and the United Nations.
Diplomatic Tensions and Uncertain Outcomes
The demand to reinstate Rosselkhozbank puts the EU in a difficult position. Granting this request could signal a willingness to make concessions, potentially encouraging Russia to seek further sanctions relief. However, refusing it could provoke tensions with the Trump administration, which is eager to secure a ceasefire.
President Volodymyr Zelenskyy has consistently opposed easing sanctions, arguing that they must remain in place until Russia ends its military aggression. European Commission President Ursula von der Leyen echoed this stance, stating that sanctions would only be lifted after Russia takes concrete steps toward peace.
As EU sanctions require unanimous renewal every six months, any member state could disrupt the process. Hungary, which has previously expressed opposition to sanctions, could leverage this situation to push for changes when restrictions are up for review on July 31.
Future of SWIFT and Global Financial Pressures
While the EU holds the power to reinstate Rosselkhozbank’s SWIFT access, the U.S. could signal leniency by ensuring that those engaging with the bank avoid legal repercussions. Analysts suggest that Russia’s demand may be a strategic move to test both Washington and Brussels, pressuring the EU to reconsider its stance on financial restrictions.
For now, the EU remains firm in its approach. France has indicated that sanctions should remain unless Russia agrees to a full ceasefire, reparations, and security guarantees for Ukraine. However, with negotiations ongoing and international pressure mounting, the debate over SWIFT and broader sanctions relief is unlikely to fade anytime soon.
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