{"id":1179171,"date":"2026-08-31T15:59:18","date_gmt":"2026-08-31T15:59:18","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/1179171\/"},"modified":"2026-08-31T15:59:18","modified_gmt":"2026-08-31T15:59:18","slug":"artificial-intelligence-could-cause-global-economic-downturn-bank-of-england-governor-warns-mkfm-106-3fm","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/1179171\/","title":{"rendered":"Artificial intelligence could cause global economic downturn, Bank of England governor warns – MKFM 106.3FM"},"content":{"rendered":"

\n Artificial intelligence could cause a worldwide economic downturn, the governor of the Bank of England has warned.\n <\/p>\n

Andrew Bailey wrote in a letter to the G20 finance ministers – meeting in North Carolina in the US – that a “future market correction” could have global effects should the value of AI <\/strong>companies plummet.<\/p>\n

It’s the latest warning on the risk posed to global finance by AI, with the Bank of England officially raising concerns over the technology in July<\/strong>.<\/p>\n

In its twice-yearly financial stability report, the UK’s central bank said AI poses threats of a potential stock market bubble, heightened cybersecurity vulnerabilities, and companies’ increasingly complex and opaque debt.<\/p>\n

Writing as chairman of the international watchdog the Financial Stability Board, Mr Bailey said in his letter that “markets remain vulnerable to a potentially disorderly correction that could spread across borders, particularly given fragilities in sovereign debt markets”.<\/p>\n

“The issue is not simply that investors are borrowing more”, he added, “but that leverage is interacting with high valuations and market concentration, in particular the increasing cross-investment between artificial intelligence companies and hyperscalers, in a way that could amplify a future market correction.<\/p>\n

“I remain concerned, therefore, that a large shock or combination of shocks could concurrently trigger multiple vulnerabilities.”<\/p>\n

Financial bodies have sounded the alarm during the past year over the sky-high valuations of companies such as OpenAI<\/strong>, Anthropic<\/strong>, and Nvidia<\/strong>, suggesting the companies are in a “bubble”.<\/p>\n

The term refers to a phenomenon where stock prices rise rapidly above what would be considered their true value – like the 1990s dot-com bubble or the 2000s US housing crisis – before crashing back, causing mass investor losses and economic contractions.<\/p>\n

The US housing bubble was widely identified as a main cause of the 2008 financial crisis, which sent the UK and many other Western countries into recession.<\/p>\n

See more from Sky News:
Could plug-in solar panels reduce your bills?
Meta to pay billions to settle ‘tobacco’ trial<\/strong><\/p>\n

AI companies worth billions – one worth trillions<\/strong><\/p>\n

It comes after stock market results showed that Nvidia is now the world’s most valuable company<\/strong>, valued at $5.1trn (\u00a33.8trn), last week.<\/p>\n

The company provides chips that power AI systems such as OpenAI’s ChatGPT and Google’s Gemini, as well as the UK’s most powerful supercomputer.<\/p>\n

It comprises more than 7% of the entire S&P 500, a major US stock index made up of companies relied on for stability and profitability.<\/p>\n

Meanwhile, OpenAI was valued at $852 billion (\u00a3629.12bn) in March, with CEO Sam Altman seeking a valuation of at least $1trn (\u00a3738bn) by the time the company goes public in 2027.<\/p>\n

It was backed by billions in investments from Nvidia, Amazon <\/strong>and SoftBank in March.<\/p>\n

Anthropic – behind the AI large language model Claude – was also valued at $965bn (\u00a3712.56bn) after a private funding round in May.<\/p>\n

In its financial stability report last month, the Bank of England said the valuations of AI companies are based on earnings forecasts, which are “highly uncertain”.<\/p>\n

\n \"Sky\n <\/p>\n

\n (c) Sky News 2026: Artificial intelligence could cause global economic downturn, Bank of England governor warns<\/a>\n <\/p>\n","protected":false},"excerpt":{"rendered":"Artificial intelligence could cause a worldwide economic downturn, the governor of the Bank of England has warned. 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