Bank of England governor Bailey warned AI could trigger financial-market shocks
and said the Bank is watching large capital flows into AI very closely. Asked
whether an AI bubble could burst, he said “at some point asset prices may see
some degree of repricing.” He said the technology has “huge potential” to boost
growth but carries significant risks, noting firms are currently priced as
winners though not all will be. Bailey added a major potential benefit is that
AI can speed up work that supports the MPC, but “it will not make decisions for
us; it is a tool for policymakers.”
