Andrew Bailey, the Governor of the Bank of England, highlighted in a speech at the University of Leicester that the UK is facing a prolonged period of low economic growth, and breakthroughs in general technologies like artificial intelligence are key to addressing this issue. He emphasized that to boost national productive potential and mitigate the impacts of an aging workforce, a robust advancement in artificial intelligence is necessary.
Bailey stated that since the years before the financial crisis, the UK's productivity growth has significantly slowed, directly limiting improvements in living standards. He pointed out that historically, technological revolutions such as the steam engine and computers have significantly driven economic growth, and artificial intelligence has the potential to be the "technological breakthrough" of our time.
He further noted that against the backdrop of aging populations in developed countries, the importance of technology in supplementing the workforce is becoming increasingly prominent. "I believe we must encourage AI development, using it to support the productive potential of the economy," Bailey emphasized. "As in the past, truly sustained economic growth is likely to depend on leaps in technology."
Regarding concerns that artificial intelligence might take over human jobs, Bailey stated there is no need to worry, drawing analogies to the technological advancements during the industrial revolution. "I am convinced it is humans using AI, not being replaced by it," he said.
Bailey also mentioned that the current low productivity is one of the main barriers preventing the UK from achieving economic growth without triggering inflation. The Bank of England expects this issue to be challenging to alleviate in the short term, necessitating reliance on technological breakthroughs to boost potential.
When discussing trade policy, Bailey emphasized that international trade is crucial for technology diffusion, but the current global trade system is severely imbalanced. While he did not directly support the Trump administration's high tariff policies, he acknowledged that this issue is at the root of current trade tensions.
Bailey agreed with former US Trade Representative Robert Lighthizer's view that free trade must be based on fair competition. He called for joint efforts from countries to reform trade rules through multilateral mechanisms to achieve a more balanced and sustainable global economic environment.
"The world is no longer one where empires and colonial systems can be maintained. We must resolve issues within a multilateral framework rather than relying on tariffs," Bailey pointed out, noting that persistent trade imbalances are not only unsustainable but also misaligned with today's global political and economic realities.
