AI will eliminate jobs like the Industrial Revolution, says the governor of the Bank of England
Artificial intelligence is likely to drive workers out of jobs in the same way as the Industrial Revolution, the governor of the Bank of England has warned, as concerns grow about the technology’s impact on entry-level employment and the young workforce.
Andrew Bailey said the rapid adoption of AI across the economy made it important for the UK to invest in training, education and skills to help workers adapt to the new roles created by the technology. Without those foundations, he warned that the labor market is at risk of becoming too fragmented.
Speaking on BBC Radio 4’s Today programme, Bailey said job seekers would find it “very easy” if they had the skills needed to work with AI, but admitted there were growing concerns about the impact on the job pipeline of young and inexperienced professionals.
“We have to think about what it does to the pipeline of people,” he said. “If it’s people working with AI, I’m not sure it’s going to change the pipeline, but we’re definitely looking at that.”
AI has become increasingly embedded in everyday life and business operations, with companies using the technology to process large amounts of data, identify patterns and perform complex tasks. While the benefits of productivity are widely accepted, there are growing concerns about their impact on employment, particularly in junior professional roles.
Official figures released this week showed the UK unemployment rate rose to 5.1 per cent in the three months to October, with young workers bearing the brunt. The number of 18- to 24-year-olds out of work rose by 85,000 during that period, the biggest increase since late 2022.
Some economists argue that higher minimum wages and higher employment taxes have made firms more cautious about hiring at the entry level. Some say the adoption of AI is already reshaping hiring decisions, with companies relying more on technology and fewer employees.
Professional services firms are among those reevaluating their staffing needs. The global chairman of PwC, Mohamed Kande, recently said that the company is slowing down the growth of statistics as AI takes over work that would require teams of experts. Tasks that once took weeks can now be completed in minutes using AI models, he said.
Bailey said concerns about technological disruption are nothing new, noting that similar fears have surfaced many times throughout history. He mentioned the concerns that arose during the Industrial Revolution, which ended up not causing many people to be unemployed but which led to the displacement of many people from their places.
“My guess would be that AI might have the same effect,” he said. “It didn’t create unemployment, but it took people out of work, and we need to prepare for that.”
Despite the risks, Bailey described AI as the most likely driver of the next phase of UK economic growth, particularly through its potential to boost productivity. However, he cautioned that history suggests it may take some time before those gains are fully realized.
The Bank of England is itself experimenting with AI, although Bailey said its use, like that of many institutions, is still early days. “To put it into normal, everyday use will take time,” he said, adding that setting the right conditions is “very important”.
Bailey also acknowledged growing concerns about a potential AI bubble, with some tech companies commanding valuations reminiscent of the dotcom era. The central bank has warned that a sharp adjustment could threaten financial stability.
“We have to look at the question of balance,” he said. “A lot of big companies are generating cash flow, but that doesn’t mean they will all be successful. We are watching it very closely because we need to understand the consequences of any sharp easing.”
The comments underscore the growing consensus among policymakers that while AI offers significant opportunities for growth, its impact on jobs, skills and market stability will need to be carefully managed in the coming years.
