UK budget to back AI security and growth strategy

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UK budget backs AI strategy

Highlights

Chancellor John Healey's budget commits hundreds of millions of pounds to AI growth and security, including funding for the AI Security Institute and £300m public-private investment in a new AI Biosecurity Lab.
Official data shows AI investment drove the UK's strongest G7 growth in H1, even as automation led to job losses like Barclays' 5,000 cuts.
The budget's rollout follows oil prices topping $117 a barrel and rising cost pressures, with £10m annually allocated to research AI's impact on jobs and industry.

Budget plan links AI spending to security goals

As reported by The Guardian, Chancellor John Healey says Wednesday's budget will commit hundreds of millions of pounds to a “distinctively British” approach to artificial intelligence, combining support for growth with safeguards against mounting technological threats.

Healey says the government is making its biggest ever investment to guard against cyber risks and the disruptive potential of AI. The measures include fresh funding for Britain’s AI Security Institute and other critical institutions, alongside public support for uses of the technology that can deliver wider economic and social benefits.

New investment is also planned for AI chip design capability in Edinburgh and for a new AI Centre of Excellence in Manchester. The Treasury also says it will back up to £300m in public-private investment in a new AI Biosecurity Lab, intended to bring together scientific expertise to protect against emerging biological threats.

The government is further allocating £10m a year to lead UK work on how AI will reshape jobs and industry, in response to concerns over disruption to employment. Healey says the aim is to protect against risks while nurturing homegrown businesses and talent, reducing Britain’s dependence on other countries advancing in AI.

Economic pressure and industry disruption shape the backdrop

The budget is being prepared amid a volatile economic backdrop, with the war in the Middle East sending shocks through global markets and adding pressure to public finances. Rising energy costs are intensifying the cost of living squeeze, while oil prices have climbed to their highest level in six months, briefly moving above $117 a barrel on Friday.

Healey says he wants the budget to give households and businesses “breathing space” this winter while also setting out the government’s broader economic vision after Andy Burnham replaced Keir Starmer this summer. He presents AI as a central part of Labour’s growth strategy, arguing that the technology can raise living standards, back UK businesses and help sustain economic expansion.

Official figures, the article says, show AI investment has helped the UK outperform weaker economic forecasts, contributing to the strongest growth performance in the G7 in the first half of this year. At the same time, concerns are growing over cyber attacks, failures in critical IT systems and job losses as companies expand automation, with Barclays cutting 5,000 jobs as part of efficiency plans linked to AI rollout.

Warnings over national resilience are also intensifying. Defence Secretary Wes Streeting has urged households to prepare for emergencies, including cyber-related disruption, while Security Minister Dan Jarvis says the latest investment is intended to help the UK use AI to strengthen national security and stay ahead of hostile actors.

Our earlier report on the Bank of England’s push for banks to adopt “bare metal” recovery planning explained how AI is increasing the scale and complexity of cyber attacks on the financial system. We noted regulators’ concern that lenders need independent fallback systems and end-to-end recovery options to keep critical services running if primary technology is compromised.

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