The Bank of England is sounding an alarm that most central banks prefer to whisper: the AI stock rally looks a lot like a bubble, and when it pops, the blast radius won’t stop at American borders.
According to BoE analysis, a sharp correction in US AI equities would ripple into UK share prices, gilt yields, and corporate credit markets. Governor Andrew Bailey has emphasized that even though the UK doesn’t host major AI firms on its domestic exchanges, the interconnected nature of global finance means Britain would absorb a significant hit.
The numbers behind the nervousness
AI-related stocks now account for roughly 44% of the S&P 500’s total market capitalization. That’s up from about 26% at the end of 2022.
The BoE has been flagging this buildup since at least October 2025, when its Bank Overground blog drew explicit parallels to the dot-com bubble of the late 1990s.
