Monthly News Roundup – August 2025

We have compiled some news, comment pieces and announcements that we hope our readers find interesting. In this instalment, there are stories relating to artificial intelligence, free trade, economic growth, employment, post-disaster reconstruction and the environment:
A new wave of clean-energy innovation is building (The Economist)
While the Trump administration has withdrawn subsidies from wind and solar power generation, there are reasons to expect innovation in green technology to continue in the United States. New energy generation technologies reduce dependence on foreign imports, which makes them popular, while the bill withdrawing subsidies from wind and solar leaves support in place for other forms of green technology, such as linear generators, geothermal energy, fuel cells and new types of nuclear power. In addition, tech companies struggling to find sufficient energy to power their data centres are investing in energy solutions, usually with a ‘green mindset’, and in some cases favour the development of small modular nuclear reactors:
https://www.economist.com/business/2025/08/14/a-new-wave-of-clean-energy-innovation-is-building
‘You will have AI friends’: Character.ai bets on companionship chatbots (Financial Times)
The chatbot maker Character.ai is a leader in creating persona-based chatbots for users to interact with. Popular with young users and with the average user spending 80 minutes per day on the app, over a third claim to have discussed important matters with the chatbot or to have transferred social skills practised on the platform to real life situations. The CEO claims that the chatbot characters will not replace ‘real friends’ but that most people will have ‘AI friends’ in the future. The company faces a number of legal suits from parents who claim that their children have suffered real harms from interacting with the platform:
https://www.ft.com/content/0bcc4281-231b-41b8-9445-bbc46c7fa3d1
How America’s AI boom is squeezing the rest of the economy (The Economist)
The development of AI is thought to be responsible for around 40% of America’s GDP growth, in spite of the sector only accounting for a few per cent of national GDP itself. Given the heavy costs of infrastructure and the rate of development, tech companies are increasingly turning to borrowing to fund their projects. As this drives the costs of energy and borrowing upwards, a slow-down in other sectors more sensitive to such price changes appears to be occurring: housebuilding, non-AI business and overall consumption are sluggish, and wage growth is weak. If a reallocation of economic resources is underway, then what will be the wider consequences be for an apparently otherwise flat economy, increasingly dependent on AI investment, should the AI boom turn to bust?
UK vacancies for entry-level jobs hit five-year low (The Times)
Vacancies for entry-level jobs in the UK have dropped to their lowest level since 2020, accounting for around a fifth of the overall market. Contract work has risen by 22 per cent since April, as organisations opt to hire workers on temporary rather than permanent contracts. Vacancies in healthcare and nursing have also suffered significant declines since April, perhaps following changes to employers’ National Insurance contributions and increases in the minimum wage:
The chancellor needs a vision. Can she find it in ‘Abundance’? (The Times)
With the difficulties faced by the Chancellor, should the previously touted vision of ‘Securonomics’, now quietly abandoned, be replaced by a focus on ‘abundance’, whereby the economy is flooded with freedom to operate and constraints on development in housing, infrastructure and energy are removed? If the government seeks to pursue economic growth, then a change in mindset with regard to regulation might well be necessary:
The $140 Billion Failure We Don’t Talk About (The New York Times)
Following Hurricane Katrina, the Federal government invested a sum for reconstruction that, when adjusted for inflation, was more than was spent on the World War II Marshall Plan to rebuild Europe or for the rebuilding of Lower Manhattan after terrorist attacks of 9/11 – yet New Orleans remains smaller, poorer and more unequal than before the storm, lacking basic services and a major economic engine beyond the tourism industry. It seems that the reconstruction lacked any clear vision or accountability, and ended up focusing on replacing what was lost rather than improvement or greater resilience in the future. The outcomes for New Orleans suggest that recovery programmes need to be radically rethought, with accountability, resilience and equity at the centre:
https://www.nytimes.com/2025/08/27/opinion/new-orleans-katrina-funds.html