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AI set to disrupt jobs as Industrial Revolution did, warns BoE governor
Artificial intelligence (AI) could displace workers on a scale comparable to the Industrial Revolution, the Bank of England's governor Andrew Bailey has cautioned. Speaking on BBC Radio 4's Today programme, Bailey stressed the UK must prioritise education and skills training to help workers transition into AI-driven roles.
Entry-level roles at risk
Bailey highlighted concerns over AI's impact on younger, less experienced professionals struggling to secure entry-level positions. "We do have to think about: what is it doing to the pipeline of people? Is it changing it or not?" he said. While AI collaboration might not alter the talent pipeline, he acknowledged the need for vigilance.
Official figures released this week show UK unemployment rose to 5.1% in the three months to October, with 18- to 24-year-olds hit hardest. The number of unemployed young workers surged by 85,000-the largest increase since November 2022-according to the Office for National Statistics (ONS).
AI's growing role in business
AI has become ubiquitous in recent years, with businesses and public sector organisations increasingly adopting the technology. Its ability to process vast datasets, detect patterns, and execute complex instructions has streamlined operations, but also raised concerns about job market disruption.
Entry-level roles in law, accountancy, and administration are particularly vulnerable. Mohamed Kande, global chairman of PwC, told the BBC the firm was scaling back hiring plans due to AI. "Now we have artificial intelligence. We want to hire, but I don't know if it's going to be the same level of people that we hire-it will be a different set of people," he said. AI models can now perform tasks that once required weeks of human labour, such as data analysis, in minutes.
Historical parallels and economic potential
Bailey drew parallels between AI's impact and the Industrial Revolution, noting that while technological advancements did not cause mass unemployment, they did displace workers. "My guess would be that it's most likely that AI may well have a similar effect. So we need to be prepared for that," he said.
Despite the risks, Bailey identified AI as a key driver of future UK economic growth. "In terms of its potential to improve productivity growth, I think it's pretty substantial. It will get used across the economy. How quickly it comes through is another question," he added. The Bank of England, which sets UK interest rates, is already experimenting with AI but acknowledged widespread adoption would take time.
Market concerns over AI valuations
Beyond job displacement, Bailey warned of a potential AI bubble, with policymakers monitoring whether tech firms are overvalued. The Bank of England recently flagged risks of a market correction akin to the dotcom crash. Jamie Dimon, CEO of JP Morgan, told the BBC in October he was "far more worried than others" about a severe correction in the coming years.
While Bailey noted most major AI firms are generating cash flow, he cautioned that not all would succeed. "We're watching it very closely, because we do need to watch, obviously, what the consequences of any sharp unwinding could be," he said.
Preparing for the AI transition
Bailey emphasised the need for robust training and education systems to equip workers with AI-related skills. "If you've got those skills, you'll find it a lot easier to get a job," he said. The challenge, he added, lies in ensuring younger workers can access entry-level roles amid AI-driven automation.
