BoE's Bailey says there could be an AI bubble

Bank of England Governor Andrew Bailey said on Thursday that there could be an AI-induced bubble in markets but the technology could still have a major impact on productivity, saying the two things were not inconsistent.

"The markets could overprice the returns, but the returns could still be substantial," he said in a press conference after the Bank left interest rates on hold. "So we'll see, but we are watching the ... implications for financial stability."

"It is, of course, perfectly possible and perfectly consistent that AI could be the next big mover in terms of productivity ... My own view personally is, I think, more likely than not it probably is.

"But we've still got quite a way to go to actually sort of see that demonstrated. At the same time, we could have a bubble, because obviously the markets are pricing the future stream of returns from this, and that's uncertain. And so, you know, those two things are not inconsistent."

REUTERS