Andrew Bailey on AI investment risks
From WATCH HEARING NOW: Bank of England Governor Bailey Faces House of Lords Economic Committee | AC14 · · DWS News
“I think the I mean you might say well there's a set of risks from the Gulf because this thing could become big enough to in a sense dominate the AI type story. I think the second thing is that there are I mean I'm actually quite a believer in the AI story as an economics proposition. So, I'm not going I'm not saying this to sort of undermine AI. I think it is actually very important. But obviously the job of the job of equity markets for instance is to value the future stream of earnings. So, to value the you know, the future productivity gains from this this thing. And they could get it wrong in a number of ways. So, they could get it wrong in well, think of three ways. One, obviously they could just overvalue the whole thing and we could still have a very positive benefit from AI but they could get it wrong in terms of the degree. Two everybody is currently priced to be a winner. In the sense that the and you look back at history actually everybody usually isn't a winner actually. That's a fairly unusual state of affairs.”
On , Andrew Bailey, Governor at Bank of England, spoke about AI investment risks during WATCH HEARING NOW: Bank of England Governor Bailey Faces House of Lords Economic Committee | AC14 on DWS News.
About Andrew Bailey
Andrew Bailey, Governor of the Bank of England, appeared before parliamentary committees and spoke at conferences in recent months, addressing the UK economy, monetary policy, and financial stability. In April 2026, the Monetary Policy Committee held interest rates at 3.75%, a decision Bailey described as an "active hold" rather than a passive wait-and-see approach, given significant uncertainty. He stated that the path of the energy price shock, driven by the conflict in the Middle East, was "very uncertain" and that a prolonged spike could lead to higher rates, while a prompt end to the conflict could lead to a more benign scenario. Bailey also noted that the MPC had "in effect tightened policy" and that there was "a bit of time" before acting on second-round effects. Bailey discussed a range of other topics, including artificial intelligence, private credit, and trade. He said that UK banks did not yet have access to the AI model Mythos, but expressed optimism they would soon have access to other models. On private credit, he described it as "playing an important role" and "a good thing," but cautioned that it is "connected into the broader system" and that regulators need to understand those interconnections. He also stated that "tariffs are not the answer" to the scarring effects of China's entry into the world trading system, and that preserving a freer trade system is "very important." Bailey emphasized the importance of central bank independence, saying it is "very important" because central banks must take decisions over a longer time frame than electoral cycles.