LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Thursday there could be an artificial intelligence-induced \u200bbubble in markets, notwithstanding the large productivity boost the technology would \u200clikely deliver.<\/p>\n
Speaking after the central bank left interest rates on hold, Bailey said there was \u200cuncertainty around future AI returns, but not really about its potential.<\/p>\n
“It is, of course, perfectly possible and perfectly consistent that AI could be the next big mover in terms of productivity,” he \u2060said. “My own \u200cview personally is, I think, more likely than not, it probably is.<\/p>\n
“But we’ve still got quite \u200da 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 \u200bthe future stream of returns from this, and that’s uncertain.\u200c And so, you know, those two things are not inconsistent.”<\/p>\n
In the monetary policy report accompanying the interest rate decision, the central bank said equity valuations seemed to be stretched in a historical context, particularly for technology companies focused on AI.<\/p>\n
That left equity markets exposed to \u2060a correction should expectations around the impact of \u200bAI become less optimistic, it said, \u200bstating that a resulting reduction in global demand could reduce inflationary pressures in Britain.<\/p>\n
“Were that bubble to deflate \u200dor burst, that \u2060would represent a tightening in financial conditions that would weaken global demand, and that would have spillovers back to the UK,” \u2060Deputy Governor Dave Ramsden said.<\/p>\n
(Reporting by William Schomberg, David Milliken, \u200cMuvija M and Suban Abdulla, writing by Kate Holton, \u200cediting by Paul Sandle and Andy Bruce)<\/p>\n","protected":false},"excerpt":{"rendered":"LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Thursday there could be an artificial intelligence-induced \u200bbubble…\n","protected":false},"author":2,"featured_media":166199,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[261],"tags":[291,31892,289,290,7440,9417,18,35567,19,17,3796,82],"class_list":{"0":"post-166198","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-andrew-bailey","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-bank-of-england","13":"tag-bubble","14":"tag-eire","15":"tag-equity-markets","16":"tag-ie","17":"tag-ireland","18":"tag-productivity","19":"tag-technology"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115503275888037674","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/166198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=166198"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/166198\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/166199"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=166198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=166198"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=166198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}