The UK is being hit harder economically by AI, with the nation losing more jobs to AI than creating them compared to rival countries.

This is according to a new report from Morgan Stanley, which found that the acceleration of job loss over job creation due to AI is hitting the UK faster than countries like Germany, the US, Japan and Australia.

The Morgan Stanley study, shared with Bloomberg, investigated organisations that had been using AI for at least a year, with a focus on five industries, including  retail, real estate, transport, automobiles, and health-care equipment.

While British firms using AI say an average 11.5% productivity boost, firms in the US saw nearly the same bump, but actually created more jobs than they cut.

In the UK, firms said that AI caused a net job loss of 8% over the past 12 months, the highest rate compared to equivalent economies, and twice the international average.

The news comes at a time when UK workers are already facing unemployment at a five year high, and staff squeezes as firms contend with rising national insurance contributions.

Most of the jobs at risk appear to be those most easily replaced by AI, including software developers. UK employers cut or did not rehire for about a quarter of their jobs due to AI.

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While other countries followed this pattern, firms outside of the UK typically hired more people because of AI, whereas UK firms did not. However, the US was the only country to see a rise in jobs due to AI.

Young people and white collar workers are being hit the hardest, with job openings falling across the entire economy by over a third since 2022, with a fifth of these losses coming from sectors most impacted by AI.

Entry-level jobs are most at risks, with Morgan Stanley saying that most organisations plan to cut jobs that would require two to five years of experience, putting university grads and early-careers workers at more risk of unemployment in sectors where AI is taking hold.