Nevertheless, the regulator acknowledged that artificial intelligence could ultimately boost productivity across a range of industries and support long-term economic growth. However, the timing and scale of such benefits remain unclear, and the real return on investment for businesses may not materialise as quickly as investors currently hope.
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Further pressure on the financial system stems from volatility in energy markets following the war in Iran. Oil and gas prices remain unstable, and the Bank of England warns that uncertainty in this area persists. Against a backdrop of shifting interest rates and turbulent energy markets, aggregate risks to the economy could amplify simultaneously.
Despite these headwinds, the Bank of England’s Financial Policy Committee concluded that the UK financial system remains resilient and continues to support the British economy. However, the regulator’s overarching message is clear: between AI, geopolitics, and market volatility, Britain has an increasing number of reasons for concern.
