By David Milliken
LEICESTER, England (Reuters) – Bank of England Governor Andrew Bailey said on Monday that artificial intelligence had the potential to be a game-changer for Britain and the global economy just as electricity was around the start of the 20th century.
Bailey said technologies that were transformative continuously improved, lowered costs and made innovation easier, boosting productivity.
“AI appears to me to have that potential, and so it could over time lift growth rates and per capita national income,” Bailey said in a speech at the University of Leicester.
Britain, like many other rich economies, is struggling to grow at the kind of that was normal before the global financial crisis of 2008-08.
That has added to the strain on government budgets. British finance minister Rachel Reeves is expected to announce cuts to her plans for spending increases on Wednesday.
Bailey said ageing populations in much of the world meant the need to use technology was all the more pressing.
“We must facilitate the growth of AI as the most likely general purpose technology which can move the needle on growth in the economy,” he said, adding that investment in human skills to take advantage of AI was also needed.
Also in his speech on Monday, Bailey reiterated his call for cooperation between the world’s major economies to resolve strains in the global trading system, which is facing upheaval from the policies of U.S. President Donald Trump.
“These two points – domestic macroeconomic forces and trade policy – are not incompatible. They sit together. So to solve these issues we need authorities to come together and strengthen the rules of engagement in a multilateral setting rather than set tariffs bilaterally,” he said.
(Reporting by David Milliken; Writing by William Schomberg)
