Bank of England governor warns AI could trigger global economic downturn

Bank of England Governor Andrew Bailey warned that artificial‑intelligence systems could face heightened volatility as a result of energy‑price shocks linked to the ongoing US‑Iran conflict. Speaking at a financial‑technology forum in London, Bailey said the war’s impact on oil and gas markets was already raising operating costs for data centres, which in turn could cause abrupt swings in the pricing and availability of AI services.

The governor noted that such fluctuations may feed into broader economic variables, including inflation and credit conditions, prompting the central bank to incorporate AI‑related energy risks into its financial‑stability monitoring framework. Bailey emphasized that the Bank of England will continue to assess how geopolitical energy disruptions could affect the digital economy and the effectiveness of monetary policy.