The Bank of England governor has called for international cooperation to tackle growing AI threats, warning that the US and Trump administration would not be able to achieve their ambitions alone.
Andrew Bailey’s comments come weeks after the US president, Donald Trump, temporarily banned foreigners from using Anthropic’s powerful Claude Mythos model.
Speaking to the Guardian before a speech to financial bosses at the annual Mansion House dinner in London, Bailey said governments around the world must join forces to ensure bad actors did not get hold of powerful – and potentially destabilising – digital tools.
“We’ve got to get better international understandings of how we deal with the introduction of frontier AI,” Bailey said, arguing this would require stronger coordinated testing to ensure AI models were safe to put into wider circulation.
The Trump administration has already frustrated allies seeking a joint approach, having temporarily banned the American AI company Anthropic from letting foreigners use some of its most powerful models, including Claude Mythos, which experts have warned pose potential threats to cyber defences.
While the ban was lifted just weeks later, Bailey said the US should be mindful that it may not be able to secure itself against growing cyber threats, or set up robust recovery plans, without global cooperation.
“The US can’t achieve what it sensibly wants to achieve, in terms of strengthening defences, on its own because it is a highly interconnected system,” he said.
He elaborated on that point in his speech to City bosses on Tuesday, saying: “No country can seal itself off from the cross-border nature of systems that are prevalent today.”
Bailey’s call for action on AI came alongside a defiant Mansion House speech from the chancellor, Rachel Reeves, as she prepares to exit the Treasury. In what is likely to be one of her last set-piece appearances, Reeves defended her record and warned her successor not to squander the “platform of stability” she had created.
“The record of the last two years makes clear that governments can achieve that [radical] change only when they combine radicalism with credibility,” she said.
“I had to earn that credibility in opposition, and I have proven it in government in every action that I have taken since I became chancellor. That hard-won credibility must be sustained and the foundations maintained if this work … is to continue.”
Andy Burnham is set to be confirmed as Labour leader on Friday, and to take over as prime minister next week. He is widely expected to appoint a new chancellor.
Reeves cited a string of statistics that she said proved she had made the right choices in her two years in post.
“Last year, borrowing fell from 5.2% to 4.2% of GDP – its lowest level in six years. Investment is up, productivity is up, and wages are up too. Waiting lists are falling faster than at any time in the last 17 years and half a million children will be lifted out of poverty during the course of this parliament,” she said.
“If I had said two years ago that this is where we would be today, people would have doubted it, but we have proven the doubters wrong.”
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As the conflict in the Middle East again flared up, after the collapse of the US-Iran memorandum of understanding, Reeves also warned that the UK economy would continue to be buffeted by shocks.
“The resumption of hostilities in the Middle East in the last few days has shown that our economic resilience will continue to be tested, and the market response to those changes shows that there is still work to do to insure our economy and our country against a volatile global landscape,” she said.
The interest rate, or yield, on 10-year UK government debt hit its highest level since May on Tuesday, above 5%, before falling slightly below later after Trump appeared to drop the threat of imposing a 20% levy on ships transiting the strait of Hormuz.
A new chancellor would have to give 10 weeks’ notice to the independent Office for Budget Responsibility to produce a new forecast before a planned budget in the autumn.
If sustained, higher gilt yields would feed through into the government’s cost of borrowing, eating into the £23.6bn of “headroom” Reeves set aside against her fiscal rules at the last forecast in March.
Whoever is in charge at the Treasury will also have to find an additional £4.7bn over the next four years, to fund the defence investment plan.
Burnham is believed to be keen to announce a cost of living package, with households predicted to be hit by higher energy bills this winter as the impact of the war takes its toll.
Bailey’s international cooperation comments came as Demis Hassabis, the British Nobel laureate and entrepreneur behind Google Deepmind called for a US-led global AI watchdog, to help test advanced models and hit the brakes on their development if they pose too many risks.
The essay, posted on X on Tuesday, suggested that an AI model that had the same cognitive capabilities as the human brain, was “probably only a few short years away”.
