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The governor of the Bank of England has drawn parallels between the potential effects of Artificial Intelligence (AI) on employment and the significant job displacement experienced during the Industrial Revolution. Andrew Bailey emphasized the necessity for the UK to equip its workforce with adequate training, education, and skills to adapt to roles that involve collaborating with AI technologies. Speaking on BBC Radio 4’s Today programme, he highlighted that job seekers with AI-related skills would find it considerably easier to gain employment. Nonetheless, Bailey expressed concern about the difficulty younger and less experienced individuals may face in securing entry-level positions due to AI’s growing presence.
Bailey raised questions about how AI might be altering the flow of talent entering the workforce, noting, “We do have to think about, what is it doing to the pipeline of people? Is it changing it or not?” He speculated that while working alongside AI may not fundamentally change this pipeline, it remains an issue that requires careful observation. AI, which is becoming increasingly integrated into both business and the public sector, enables rapid processing of vast datasets and pattern recognition, but this advancement has sparked worries about its effects on the labor market. Recent ONS figures revealed a rise in the UK’s unemployment rate to 5.1% in the three months leading to October, with the youth unemployment rate experiencing a significant increase—an additional 85,000 people aged 18 to 24 became unemployed, marking the largest rise since November 2022.
There is debate surrounding the reasons for declines in entry-level hiring. Some attribute it to increases in the minimum wage and higher taxes, which may deter businesses from recruiting novices. However, other voices suggest that AI’s expansion could itself be a key factor in reducing the demand for junior staff, especially graduates. Entry-level roles in professional sectors such as law, accounting, and administration are believed to be particularly vulnerable to AI-driven changes. PwC’s global chairman, Mohamed Kande, reflected on this, stating, “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 pointed out that tasks once performed by consultants, like sifting through large amounts of data, may soon be handled by AI, turning work that took weeks into minutes.
Bailey contextualized current anxieties about technology’s impact on employment by recalling historical concerns, including those voiced during Queen Elizabeth I’s reign about the knitting machine. He observed that, as with the Industrial Revolution, AI is expected to displace jobs but is unlikely to cause widespread long-term unemployment. Bailey also described AI as a significant potential driver of the UK’s next phase of economic growth, especially in boosting productivity. While the Bank of England and similar institutions are experimenting with AI, he cautioned that mainstream adoption will take time and stressed the importance of preparing the necessary conditions to support this transition. On a related note, there are mounting concerns over the possibility of an AI-related market bubble, with the Bank of England warning of risks reminiscent of the dotcom crash. Jamie Dimon, CEO of JP Morgan, expressed heightened anxiety about a major market correction, a sentiment Bailey echoed, emphasizing the need for vigilance given the potential consequences of any abrupt market downturn despite many large AI firms currently generating positive cash flow
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