Andrew Bailey, the Bank of England's governor, said artificial intelligence and robotics will be a "critical source" of the faster growth the UK economy needs. He was speaking at the Federal Reserve's annual conference in Jackson Hole, Wyoming, where he said there was a "different growth story" in the UK compared with the US.
"Having said that, I think AI is critical here because we need to see faster growth in the UK, we need to see faster productivity growth, and I think AI and robotics are a critical source of that," he said in an interview with Bloomberg TV.
On the cost of living, Mr Bailey said he felt the so-called second-round effects of inflation in the UK were "quite subdued", meaning things like wage demands and broader shop price increases.
"We are looking at the second-round effects of energy shocks, we're looking at the question of do we expect inflation to return to target and over what time," he said.
"The UK situation at the moment, so far, is I think we're seeing quite subdued second round effects. I think we've seen a softening of the labour market for some time now. That's why I've taken the view that I think we can watch this situation for the moment. But we have to come back to it."
He added: "I think we are seeing at the moment relatively muted second-round inflation effects but obviously this is an evolving situation and I can't give you any promise that will continue. Our job is to get inflation back to target and we will do that."
The Bank of England is tasked with keeping Consumer Prices Index (CPI) inflation at a 2% rate. CPI inflation rose to 2.9% in July, the highest rate since March after energy prices were pushed up by the Iran war, official figures showed.
