Artificial intelligence is likely to displace British workers even as it makes the country more productive, Bank of England Governor Andrew Bailey said in his most stark warning yet on the technology’s impact.
Bailey said on Friday that the UK needed to prepare for workers being pushed out of jobs amid fears that it is already denting demand for many white-collar roles. He said it could hit the pipeline of talent that allows workers to climb the career ladder to more senior positions.
In an interview with BBC Radio 4, the governor drew on historical examples of technology affecting jobs at least in the short term, from the knitting machine in the Elizabethan era to the industrial revolution.
“We can now look back and say it didn’t cause mass unemployment, but it did displace people from jobs and this is important,” he said. “My guess would be that it’s most likely that AI may well have a similar effect.”
The head of Britain’s central bank is optimistic that AI can revive the country’s tepid productivity growth rates but believes that there could still be a bubble in global stocks exposed to the technology. The weak growth of recent decades is down to the economy being stuck between waves of innovation, according to Bailey, with AI a promising candidate to change that.
However, there is growing evidence that AI is starting to damage demand for certain jobs in the UK, particularly for young graduates and in professional roles.
It comes at a time when the labor market is already weakening given a subdued economy and rising employment costs after the Labour government increased payroll taxes and the minimum wage. Figures earlier this week showed unemployment rose to 5.1% in the three months through October, the highest in almost five years.
Bailey raised concerns about AI dampening the pipeline of young talent that would normally climb through the ranks to more senior positions.
“We still need people to rise up through that to be senior consultants, senior lawyers, senior accountants,” he said. “I think we do have to think about, what is it doing to the pipeline of people?”
He said that the country needs to train workers to be ready for the potential shake-up.
“The really important element there is that we have training, education, skills in place, and that we positively encourage and foster that so that people can move into jobs that use AI,” he said.
Photograph: Bank of England Governor Andrew Bailey; photo credit: Chris Ratcliffe/Bloomberg
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