LONDON

The widespread adoption of artificial intelligence is likely to displace people from jobs in a way seen during the Industrial Revolution, the governor of the Bank of England warned, as concerns grow about the impact of the technology on younger people entering the labor market.

Andrew Bailey said the UK needs to have the "training, education, (and) skills in place" to help workers transition into jobs that use AI.

Speaking to BBC Radio 4’s Today program on Friday, Bailey said people seeking work would find employment “a lot easier” if they had those skills.

However, he cautioned that AI could make it harder for younger, inexperienced professionals to secure entry-level roles.

“We do have to think about: what is it doing to the pipeline of people? Is it changing it or not?” he said. “I think if it’s people working with AI, I’m not sure it will change the pipeline, but I think we’re right to have an eye on that point.”

AI is increasingly embedded across the economy, enabling computers to process vast amounts of data, identify patterns and follow complex instructions.

While many see its potential to boost productivity, there are growing fears about its effect on jobs.

Official figures released this week showed the UK unemployment rate rose to 5.1% in the three months to October, with young people hit hardest.

The Office for National Statistics reported that the number of unemployed 18-24-year-olds increased by 85,000 over the period, the largest rise since November 2022.

Some critics have blamed increases in the minimum wage and higher taxes for making firms more reluctant to hire junior staff.

Others argue AI is already reducing the need for entry-level workers, particularly in professions such as law, accountancy and administration.

Bailey said fears about new technology were nothing new, noting that concerns stretched back centuries.

“As you saw in the Industrial Revolution … it didn’t cause mass unemployment, but it did displace people from jobs,” he said. “My guess would be that it’s most likely that AI may well have a similar effect.”

He described AI as the “most likely source of the next leg up” in UK economic growth, though warned that widespread adoption would take time.