Bank of England warns AI boom could jolt markets

Bank of England Governor Andrew Bailey warned that heavy investment in AI could create shocks in financial markets if expectations run ahead of reality. Bailey said AI has “great potential to strengthen growth in our economies,” but added that it carries “substantial risks” that policymakers need to monitor closely.

Asked whether an AI bubble could burst, Bailey said there could be “some correction of asset prices at some point.” He suggested markets appear to be assuming broad success across major AI companies, saying, “Everybody is currently priced to be a winner.” Bailey said authorities are preparing for market shocks and need to ensure the financial system remains resilient.

The FTSE 100 was down 124-points at 10,481 shortly after opening, while Brent crude oil futures were down 1.12% at $96.93 a barrel. No FTSE 350 companies were scheduled to report results today.