Is AI keeping Britain afloat?

Plus: freeze the National Living Wage, and are we being gaslit by the grid operator?

Oct 15, 2026

Good news for John Healey? New figures from the ONS today showed the economy grew 0.1% in August. That’s hardly a blockbuster figure, but given that a contraction was widely expected, it could have been worse. If nothing else, we should take pride in the UK’s ability to keep going in the face of all the forces against it.

What’s behind this unexpected resilience? Digging into the numbers, business investment in tech appeared to be the main driver, suggesting that the AI boom is serving us well. There’s a catch, though: the chief economist at KPMG told The Telegraph that ‘the economy’s growing reliance on a small number of sectors could become a source of concern’. And let’s face it, we’re no better at building data centres than we are at building houses.

Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.

Marc Sidwell
Editor, CapX

Today’s Takes

Fresh thinking from CapX

Labour are pricing young people out of work

Joseph Dinnage

‘For the likes of Andy Burnham, who see the private sector as little more than a cash cow for central government, the idea that giving businesses more freedom over their hiring practices could help the vulnerable is incomprehensible.’

The NEETs crisis is terrible. Those affected suffer higher rates of mental health issues, and cost the public purse an arm and a leg. The best thing for everyone would be to make it easier for young people to get into work. Unfortunately, a barrage of bad policies have made it too costly for businesses to hire new staff. To change this, the Government should freeze the National Living Wage for at least five years. Read More

Healey will bill you for Whitehall’s waste

Damian Pudner

‘Westminster seems increasingly interested in how much money is committed to public services rather than what that money actually achieves.’

Politicians are continually rewarded for promising extra spending but what’s the result? They are rarely held accountable for actually improving the services they provide. Look at the NHS: its budget was protected from austerity, but poor productivity and long waiting times continue to plague the service. Improving government efficiency should be Labour’s number one priority. Read More

Stat of the Day

Best of the Web

Britain’s economy is growing – for now

Michael Simmons, The Spectator

‘Just Stop Oil’s operatives in Hormuz and the Department for Energy Security and Net Zero continue to push energy costs up and, with inflation expected to peak at more than 4% and more interest rates likely, it’s going to be increasingly difficult for the private sector to keep up the heavy lifting.’

GDP has increased again, despite expectations. We can mostly thank the growth in AI, along with advertising and the legal sector. Even more surprising, with growth so far this year of 1.8% alongside the loss of 95,000 jobs, productivity growth must be back as well. But with higher energy prices on their way, it’s imperative that John Healey’s Budget doesn’t increase the tax pressure on businesses and workers. Read More

Why are power grid bosses gaslighting us?

Juliet Samuel, The Times 🔒

‘On top of this, you have a regulator and grid operator moving at the pace of a Siberian town clerk in a Chekhov play.’

Britain’s grid control room has had a worrying few months, with consecutive major forecasting errors and calls for help from our European neighbours. Instead of explaining what’s happening, grid operator NESO has hired a PR agency to convince us everything’s fine. The real problem is an overconfident energy transition plagued by under-investment and lack of planning. Read More