BANK OF ENGLAND WARNS OF AI MARKET BUBBLE RISK – AI valuations, Trump’s Fed attacks raise global market concerns
The Bank of England is warning of a growing risk of a sudden global market correction, raising alarms over soaring valuations in artificial intelligence companies.
Policymakers say the recent surge in AI optimism has pushed valuations to record highs, with OpenAI now worth about $500 billion — more than triple its value a year ago. But the Bank’s Financial Policy Committee cautions that markets are “stretched,” and that any loss of faith in AI’s potential could trigger a sharp downturn.
The warning comes amid broader financial instability. The Bank also flagged the threat of a “sharp repricing” of U.S. dollar assets if the Federal Reserve loses credibility — a concern heightened by Donald Trump’s repeated attacks on the Fed’s independence.
Analysts say the combination of inflated AI stocks and political pressure on central banks could spell turbulence ahead for global markets and potential spillover effects for the UK economy.
