With no sense of irony the Governor in his global capacity working for financial stability warned against excessive borrowings for AI possibly leading to a sell off in AI shares which could lead to a collapse of bonds. Well he should know. It was the announcement of a large sales programme of UK government bonds just before the Truss budget that helped collapse the gilt market. This was proven when the Bank reversed its sales policy and wiped out much of the bond damage almost as soon as it had happened. It took Labour and its higher spending and borrowing plans to take interest rates well above the worst Truss level and keep them there throughout 2025 and 2026 to date.
This is not the first warning of possible market falls we have had from the Governor. He warned in April of a private debt led collapse, after correctly identifying a big build up of such debt. He now seems more concerned about AI and leverage ownership of shares though e mentions private debt in passing.
I am against the Bank issuing such general warnings and gloomy forecasts. If the Governor thinks tec based borrowing is excessive then he has a range of powers to stop that being true in the UK banking system. As it is more likely to be happening in the US than in the UK he can have a firm and private conversation with the Head of the Fed who can do something about it in the US. The UK needs more tec investment, not less. Putting out a general warning either makes him look foolish when the forecast turns out to be wrong, or weak if it is right and he has taken no regulatory measures to stop it.
September 1, 2026
Good morning.
There was a time when the closest one got to know the Governor of the Bank of England was through his signature on a bank note, such was his obscurity. All financial information and action came either from the Chancellor of the Exchequer or, the Treasury.
With the creation of a so called, ‘independent’ BoE, we now seem to have a rival for air time on financial matters with the government. And I am not too sure if this is a good thing. In my view our institutions have gone rogue and the power of both the government and parliament, and by extension the people, have been seriously eroded. The TB Reforms have failed and none of the main parties seem interested, much less prepared, to do anything about. They ALL seemed resigned to failure, just hoping it is not on their watch.
September 1, 2026
It will be interesting to see what stunt he pulls if a Right Wing government is elected at the next GE. The BoE was instrumental in the downfall of Truss because she was a disruptor and wasn’t following the WEF guidelines.
As for AI, I think we have the making of another year 2000 tech bubble about to burst and leaving lots of people with a hangover.
The interesting thing with AI is the sudden rash of DataCentres springing up consuming vast amounts of power and water. It seems net zero doesn’t apply to the tech sector when they are allowed to install banks of unabated diesel generators because renewables aren’t reliable, but evidently good enough for the population at large.
September 1, 2026
Such a statement of the obvious not sure whether it was more laughable or embarassing. Maybe he even found out from his G20 peers in the Carolina mountains where he is currently enjoying his latest expensed junket.
A low grade governor sadly and one who will always be wise after the event.