Bank of England Governor Warns of 'AI-Induced Bubble' in Markets
Governor Andrew Bailey said markets may be incorrectly pricing the uncertain future returns from AI.
Bailey's 'Bubble' Comment
Bank of England Governor Andrew Bailey said that "there could be an artificial intelligence-induced bubble in markets." The warning came after the central bank's decision to leave interest rates on hold.
Productivity vs. Price
Bailey's comment was nuanced. He acknowledged that AI is "more likely than not" the next major driver of productivity. This is a theme he has discussed in prior speeches, including one in October 2025.
However, the governor stated that a bubble could exist at the same time as this potential productivity boom.
Risk and Uncertainty
Governor Bailey explained the risk …
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