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Thu, 01 Oct 2026

Thu, 01 Oct 2026 AI boom could trigger market shocks, Bank of England boss warns

Andrew Bailey says the central bank is watching the waves of cash being invested in artificial intelligence "very carefully".
Bailey pointed out that some AI firms are being valued as multi-trillion dollar businesses, with companies like Nvidia currently holding a valuation of $5.5tn (£4.14tn). He warned that if these big bets don't pay off, there could be significant corrections in asset prices. "There is a large, very large, amount of investment going into this sector now," Bailey said. "Everybody is currently priced to be a winner." However, he cautioned that not everyone will emerge as a winner, citing the example of Netscape, which was once a market leader but no longer exists today. Bailey also highlighted other risks associated with AI, including its potential use for cyber attacks and deepfakes (AI-made pictures and videos of people). He stated that AI has created a "much more powerful way of uncovering vulnerabilities" and warned that in the wrong hands, it could be a "very powerful weapon". Another risk is the rise of deepfakes which can fool the public. Bailey had first-hand experience with this when he saw fake images depicting him and Nigel Farage having a physical fight on social media. Despite these risks, Bailey emphasized the potential benefits of AI for the UK economy, particularly in speeding up the work that supports the Monetary Policy Committee (MPC), which sets interest rates.