The Autumn Budget 2025, unveiled by Chancellor Rachel Reeves, places artificial intelligence and regional development at the centre of plans to drive economic growth, bolster national security and build a fairer society. The package combines targeted fiscal measures, public investment and policy reform to accelerate innovation, create jobs and strengthen the UK’s position in emerging technologies.

A key initiative is the creation of two AI growth zones in Wales, expected to deliver more than 8,000 jobs. The zones include £10 million for the semiconductor sector in South Wales, reinforcing the region’s status as a tech hub. Nationally, £22 billion is committed to AI infrastructure, including support for the UK’s largest supercomputer. These investments align with revised economic forecasts showing improved growth prospects.

Reeves highlighted reforms to public procurement that allow the government to “buy British” in sectors vital to national security. “We have changed government procurement, so we can buy British when it’s crucial to our national security including … today for AI, driving innovation and building that great industry here in Britain,” said Reeves, Chancellor.

The budget allocates £13 billion in flexible funding to local and regional leaders for skills, business support and infrastructure, alongside extended business rates retention in areas including West England, Liverpool City Region and Cornwall until 2029. Defence spending will rise, with investment targeted at industrial centres such as Portsmouth, Barrow and Plymouth, and the creation of a Defence Growth Board to oversee technological innovation.

Transport commitments include the Lower Thames Crossing, Midlands Rail Hub and TransPennine Route Upgrade. The Northern Growth Corridor and Northern Powerhouse Rail also receive backing, while a rail fare freeze was welcomed by industry leaders.

Leaders in technology and public services emphasised the need for responsible AI use. John Lucey, VP EMEA at Cellebrite, noted AI’s potential in areas such as digital forensics but stressed the importance of human oversight. Stuart Harvey, CEO of Datactics, called for greater investment in data infrastructure and governance, while Blake Richmond, CEO at Resonate Group, linked AI to transport modernisation and regional growth. Sheila Flavell of FDM Group praised welfare changes, including the end of the two-child benefit cap, as a boost for working parents returning to tech careers.

The economic backdrop includes a £2 billion annual rise in capital spending, support for housebuilding to reach a 40-year high, and plans to keep day-to-day spending under control. Welfare reforms are expected to save £4.8 billion, with new investment in personalised employment support. Inflation is forecast to stabilise, helping businesses and households.

Northern Ireland will see support for advanced manufacturing and a Belfast to Derry-Londonderry R&D corridor, plus a £16.6 million fund to boost trade links with Great Britain. Scotland will benefit from investment in low-carbon technologies and infrastructure renewal.

The Confederation of British Industry welcomed the focus on innovation and infrastructure, highlighting the AI Growth Zones and commitments to speed up planning as key to long-term growth.

While challenges remain, the budget signals the UK’s intent to lead in AI and digital development. With a focus on technology, security and connectivity, the government is setting out its vision for a stronger, more resilient and future-ready economy.

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