“We have to think: What is it doing to people's pipeline? Is it changing it or not changing it?” he said.
“If it's someone working with AI, I don't know if that's going to change the pipeline, but I think we're right to focus on that.”
In recent years, AI has become a part of everyday life and is increasingly being implemented in businesses and the public sector.
This technology allows computers to process large amounts of data, identify patterns, and follow detailed instructions on what to do with that information.
However, there are concerns that it is already having an impact on the job market.
Official figures released this week showed Britain's unemployment rate rose to 5.1% in the three months to October, with younger workers particularly affected.
The number of unemployed 18 to 24-year-olds rose by 85,000 in the three months to October, the biggest increase since November 2022, the Office for National Statistics (ONS) said.
Some argue that higher minimum wages and higher taxes are making it less attractive for businesses to hire entry-level staff.
However, some companies say the growth of AI could ultimately lead to fewer hiring of younger employees, especially new graduates.
Entry-level professions are believed to be most affected by AI, particularly in fields such as law, accounting, and government.
The head of accounting giant PwC recently told the BBC that the company is scaling back its headcount growth plans.
“Artificial intelligence is now here. We want to hire, but we don't know if it's going to be the same level of talent that we're hiring. It's going to be a different talent,” said global chairman Mohamed Khande.
Companies that previously contracted PwC consultants to vet data and documents can now use AI models instead, turning weeks of costly work into minutes.
Mr Bailey said concerns about the impact of technology on the population have emerged at different times in history and go back centuries, going back to the time when Queen Elizabeth I was concerned about the impact of the invention of the knitting machine on her subjects at the time.
“As we saw with the Industrial Revolution, I think now that time has passed, we can look back and say that the Industrial Revolution didn't cause mass unemployment, but it did push people out of work. This is important.”
“My guess is that AI will most likely have a similar impact, so in a sense we need to prepare for that.”
Mr Bailey said AI was the “most likely source of the next step up” for the UK's economic growth.
“I think this is quite significant in terms of the potential to improve productivity growth. It will be leveraged across the economy. How quickly that will happen is another question, but history suggests it will take time.”
Mr Bailey said the Bank of England, which sets Britain's interest rates, was using AI, but added that it and other banks were “probably all still experimenting”.
“For it to become kind of mainstream, it's going to take time for it to be used on a daily basis, but it's really important to clearly focus on the prerequisites and putting all the conditions in place for that to happen,” he added.
