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Bank of England warned that AI valuations remain vulnerable to a sharper correction

The FPC said a bigger shock to earnings expectations could trigger a steeper selloff than July's, with spillovers to sovereign debt markets

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The Bank of England warned on Wednesday that artificial intelligence valuations remain vulnerable to a correction more severe than the one that struck in July, with potential spillovers into sovereign debt markets and the broader financial system.

The central bank's Financial Policy Committee said the risk of a sharper repricing persists because valuations remain high and are underpinned by strong expectations of future earnings. Should those earnings expectations suffer a more severe blow — whether from doubts about how quickly AI develops or spreads — the resulting sell-off could be steeper than what........

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