Employees in London are using AI at work far more than anywhere else in the UK, and it’s setting them and their employers up to win down the line, according to new research from Employment Hero.
After a period in which London’s employment growth trailed the East and the North, the gap suggests sustained AI adoption could help drive renewed jobs and wage growth in the capital.
Why London Workers Use AI More Than the Rest of the UK
Employment Hero’s AI Paradox at Work, a survey of more than 3,500 UK employers and employees carried out with research firm Focaldata in April and May, found that 53% of London workers use AI daily, against 36% nationally. That daily habit has hardened into real confidence: 61% of employees in the capital call themselves AI-competent, against 41% nationally, and 83% say AI tools have affected the quality of what they produce, against 73% nationally.
However, much of that confidence looks self-taught rather than formally trained. Seventy-eight per cent of employees in London say they’re picking up AI skills through social media, against 56% elsewhere in the UK, a sign of how proactively they’re building the skill, even as workplace AI training is still catching up across the UK.
[KSB: Do we want a line here on the risks or leave to the other piece?]
How the AI Skills Gap Varies Across UK Regions
This isn’t a simple London-versus-everywhere split. The decline is steady the further from the capital you go, and it shows up in regions built around other major UK cities, not just in rural areas. In the North West and Yorkshire and the Humber, for example, daily AI use falls to 34% and 31% respectively, both below the 36% national average, meaning a worker in those regions is about half as likely to be using AI on a given day as a worker in London.
Part of that gap likely comes down to resourcing that, historically, hasn’t been spread evenly across the country. A government review of the UK’s AI skills gap points to the extent of that divide. It found that demand for AI skills, especially expert-level skills, is already concentrated in London and the South East, and warned that this risks deepening regional economic imbalances rather than closing them.
How AI Adoption Is Changing Hiring and Entry-Level Jobs in the UK
London businesses are also more likely to say AI skills matter when they hire, with 41% against 36% nationally, and a 57% increase in entry-level roles over the past two years, against 50% across the UK, even as the broader cost of hiring young people in Britain keeps rising.
The same pattern shows up beyond London too. Across the UK, Australia, Canada and New Zealand, businesses that put AI at the core of their operations were more than twice as likely to have grown entry-level roles over the past two years as businesses with no AI adoption at all, 62% against 30%, which suggests the link between AI use and junior hiring isn’t unique to the capital. UK business leaders were also the most likely of the four countries to say AI will increase demand for entry-level roles specifically, at 24%, against 13% in Australia, 15% in Canada and 12% in New Zealand, evidence that Britain is betting on that link more heavily than its peers are.
London Jobs Market: Employment Up 3.3% in June as SME Hiring Rebounds
Employment Hero’s platform data, drawn from its SME payroll customers, shows employment in London grew 3.3% month-on-month in June, ahead of the 2.5% UK average, with wages up 1.9% month-on-month and the median full-time salary in the capital reaching £55,872.
As Kevin Fitzgerald, UK Managing Director at Employment Hero, points out: “London’s jobs market moves fast. A few months ago employment growth in the Capital was stalling and today, our data shows that SMEs are hiring again.”
While the numbers look positive, however, the AI gap raises fresh considerations for the rest of the UK. As Kevin put it: “It’s clear that AI is going to play a central role in the future of employment, whether that’s large AI companies choosing to call London home or small businesses leveraging the technology for growth. Our new research shows that Londoners have embraced AI in numbers. That’s great for the capital, but there’s a real risk the rest of the UK gets left behind if that momentum isn’t matched.”
AI Skills Now Pay 34% More – What That Means for London’s Workforce
Another reason this gap is significant is evidenced in recent data from outside Employment Hero’s research entirely. Google’s UK Economic Impact Report, produced with research firm Public First and published at the end of June, found that the most advanced 15% of UK AI users (which it terms AI Trailblazers, workers who use the technology for complex, creative tasks rather than occasional simple ones) are 84% more likely to have been promoted in the past year, 88% more likely to have received a positive performance review, and 55% more likely to have secured a pay rise, even once age, sector and other factors are accounted for.
Employment Hero’s coverage of PwC’s 2026 AI Jobs Barometer also found that UK workers with in-demand AI skills now command a wage premium of 34.2%, up from 11% the year before, and that companies most exposed to AI have grown headcount by 52% since 2018, against 36% among companies less able to make use of it.
While neither study is specific to the capital, the trends they’ve highlighted are hard to ignore. If deeper AI use already tracks with faster pay and promotion nationally, and London has both the highest rates of daily AI use in the UK and a dedicated investment programme aimed at deepening that lead, the usage and confidence gap between London and the rest of the country looks more likely to widen than close on its own.
Will the Government’s £200m AI Skills Plan Close the Regional Gap?
While government initiatives aimed at boosting AI skills are increasingly being rolled out, including the recent £200 million package announced alongside June’s AI Adoption Summit, aimed at giving 10 million workers across the UK AI skills by 2030, Employment Hero’s data shows the urgency of scaling up AI skills across the UK. Whether that national programme closes a gap of that size, or London’s advantage keeps compounding faster than it can, will be revealed in due time.
