Artificial intelligence (AI) is set to profoundly reshape the employment landscape in the United Kingdom, Bank of England Governor Andrew Bailey has warned. While the technology promises significant gains in national productivity, Bailey issued one of his clearest and most direct cautions yet regarding the potential social and labour market consequences of AI adoption.
In a speech delivered on Friday, Bailey stressed that the UK must prepare for potentially sweeping changes across the employment chain. He highlighted that white-collar professions may be particularly affected, noting early signs of reduced demand in certain roles. “This is likely to alter traditional career progression paths, particularly for younger professionals aspiring to senior positions,” he remarked, emphasising the need for proactive planning.
During an interview with BBC Radio 4, Bailey drew parallels with historical technological disruptions, from Elizabethan weaving machinery to the Industrial Revolution. “We have repeatedly seen technology displace workers,” he explained, “though it has not led to sustained mass unemployment. AI is likely to have a similar impact in reshaping the structure of work.”
Despite acknowledging AI’s potential to enhance productivity, Bailey underscored the long-term stagnation the UK has experienced in output growth. He also issued a cautionary note regarding the risk of an investment bubble in global equity markets driven by excessive enthusiasm for AI technologies.
Emerging evidence already indicates that AI is beginning to influence sectors such as law, finance, and consulting, with younger professionals particularly affected. These developments are occurring against the backdrop of a relatively slack labour market, slow GDP growth, and modest increases in wages and minimum pay under the current Labour government. Official figures show that unemployment reached 5.1 per cent in the three months leading up to October—the highest level in nearly five years.
Bailey emphasised the importance of maintaining a strong talent pipeline. “We still need highly educated and well-trained professionals to fill senior consultant, senior lawyer, and senior accountant roles. We must consider how AI is reshaping this flow of talent,” he said.
He concluded with a call for national investment in training and education. “It is vital that we equip people with the right skills, education, and training to transition into jobs that leverage AI. Preparing the workforce for this upcoming technological upheaval is not optional—it is essential.”