Bank of England Governor Warns AI Likely to Displace Jobs, Calls for Skills Development
Bank of England Governor Andrew Bailey has warned that artificial intelligence (AI) is likely to displace jobs on a scale similar to the Industrial Revolution. He emphasized the need for training and skills development to move workers into AI-enabled roles, noting that securing employment would be easier with AI-related skills. However, Bailey pointed out that younger, inexperienced workers may struggle to obtain entry-level roles due to AI advancements.
Recent data shows UK unemployment rose to 5.1% in the three months to October, with 18- to 24-year-olds experiencing a reduction of 85,000 positions—the largest rise since November 2022, according to the Office for National Statistics (ONS). Entry-level professional roles, especially in law, accounting, and administration, are viewed as most affected by AI. Mohamed Kande of PwC noted that the firm may hire fewer people as AI expands.
Despite these challenges, Bailey argued that AI could be a key driver of productivity growth for the UK. He expects widespread adoption to occur gradually as necessary conditions are established. The Bank of England itself uses AI and observes that other institutions are experimenting with the technology. The policy focus is on creating enabling conditions for AI adoption in the economy.
Concerns have been raised about a potential AI-related market bubble. Policymakers plan to monitor valuations and the possibility of an unwinding, even as major firms continue to generate cash flow.
