Andrew Bailey, governor of the Bank of England, warned that AI is likely to displace workers similarly to the Industrial Revolution. He stressed that the UK needs training, education, and skills programs to help workers transition into AI-related roles. Bailey told BBC Radio 4’s Today programme that job seekers with these skills will find employment much more easily.
He also noted that younger, inexperienced professionals may struggle to secure entry-level roles due to AI. “We have to think about what it is doing to the pipeline of people. Is it changing it or not?” he said.
AI’s Growing Role in Business and Public Sector
AI is increasingly used by businesses and public institutions to process large datasets, identify patterns, and automate tasks. While adoption grows, concerns about its impact on the job market have also risen.
Official figures show UK unemployment rose to 5.1% in the three months to October, with 18 to 24-year-olds seeing the largest increase since November 2022. Some analysts attribute part of the problem to minimum wage rises and higher taxes, making entry-level hiring less appealing.
Impact on Entry-Level Professional Jobs
Entry-level jobs in law, accountancy, and administration are particularly vulnerable. PwC global chairman Mohamed Kande said the firm is scaling back plans to hire juniors. AI now allows companies to replace weeks of data processing work with automated systems.
Historical Perspective and Economic Opportunities
Bailey highlighted historical parallels, noting that worries about job displacement from technology stretch back centuries, including concerns over the knitting machine during Queen Elizabeth I’s reign. He said AI could similarly displace jobs but not cause mass unemployment.
He also emphasized AI’s potential to boost UK productivity and economic growth. The Bank of England is experimenting with AI, but mainstream adoption will take time. Bailey stressed that policymakers must prepare the right conditions for AI to succeed.
Concerns Over a Potential AI Bubble
Policymakers also worry about an AI bubble. Overvalued AI firms could trigger a market crash, reminiscent of the dotcom bubble. Jamie Dimon, CEO of JPMorgan, said he fears a serious market correction in the coming years.
Bailey acknowledged that most large AI companies generate cash flow, but he emphasized the need to monitor valuations carefully. “It doesn’t mean they’ll all succeed, but we are watching closely to understand the consequences of any sharp unwinding,” he said.
