On 1 April 2026 Deputy Governor Sarah Breeden replied to the Treasury Select Committee's 20 January 2026 report on AI in financial services, rejecting the Committee's 'wait and see' characterisation while reaffirming a technology-agnostic, outcomes-focused approach. The letter commits the Bank and PRA to a 2026 programme — AI as a PRA supervisory priority, building further on SS1/23, the fourth biennial AI survey, an AI Consortium report, repeat industry roundtables, and FPC work on agentic AI — and says the Bank 'will not hesitate to act when justified' and keeps the need for further guardrails under review.
| Document | BoE response to Treasury Committee AI inquiry (Apr 2026) — Response to TSC inquiry report on AI in financial services |
| Issued by | Bank of England, Prudential Regulation Authority, and Financial Conduct Authority |
| Type | Letter |
| Status | Final |
| Published | Apr 1, 2026 |
| Applies to | Statement of the Bank of England and PRA's approach; relevant to all PRA-regulated firms |
| Official source | bankofengland.co.uk ↗ |
| Use cases | AI governance (general) · Model risk management · Third-party & vendor AI · Generative & agentic AI · Trading & capital markets · Cybersecurity |
What are the key points of BoE response to Treasury Committee AI inquiry (Apr 2026)?
- Responds to the TSC's January 2026 report, which had urged FCA guidance on Consumer Duty and SM&CR for AI by end-2026 and designation of major AI and cloud providers as Critical Third Parties.
- Disputes the 'wait and see' label; describes DP5/22, FS2/23, SS1/23 and the October 2025 CRO roundtables as proactive supervision.
- AI adoption is a PRA 2026 supervisory priority; PRA intends to build on SS1/23 in 2026.
- FPC's April 2026 Record: generative and agentic AI not yet systemically risky, but further work on agentic AI in payments and markets requested.
- AI Consortium (established May 2025 with the FCA) to publish a report in 2026 on third-party concentration, AI edge cases in credit and trading, generative-AI explainability, and market contagion.
- Cross Market Operational Resilience Group AI Taskforce outputs cited: AI Baseline Guidance Review (May 2025), a Shared Responsibility Model, and two AI-enabled severe-but-plausible cyber scenarios.
- Flags financial-stability risks from an AI-related asset-price correction and rising debt financing of AI infrastructure.
What did BoE response to Treasury Committee AI inquiry (Apr 2026) change for banks?
It is the most complete statement of where UK prudential AI policy stands in 2026: no rulebook, but a dense programme of supervision, monitoring and public-private work, with an explicit reservation of the right to add guardrails. For banks it confirms that 2026 supervisory dialogue will probe AI governance in detail.
Did the Bank of England agree to new AI rules after the Treasury Committee's report?
No. It reaffirmed its technology-agnostic approach on 1 April 2026 but committed to building on SS1/23, running the 2026 survey, publishing an AI Consortium report, and keeping the need for further guardrails under review.
What did the Treasury Committee recommend on AI in January 2026?
That the FCA publish practical guidance by end-2026 on applying the Consumer Duty and SM&CR to AI, and that HM Treasury designate major AI and cloud providers as Critical Third Parties.
| Date | Document | Status |
|---|---|---|
| Jul 14, 2026 | HM Treasury Financial Services AI Adoption Plan (Jul 2026) — Financial Services AI Adoption Plan | Final |
| Jun 5, 2026 | 2026 BoE/FCA AI survey — The Bank of England and FCA's 2026 AI Survey | Final |
| May 15, 2026 | BoE/FCA/HMT joint statement on frontier AI and cyber resilience (May 2026) — The Bank, FCA and HM Treasury joint statement on Frontier AI models and cyber resilience | In force |
| Apr 1, 2026 | BoE/PRA plan for safe AI innovation (Apr 2026) — Letter from Sarah Breeden and Sam Woods to the Chancellor and Secretaries of State on enabling safe AI innovation | Final |
| Jan 28, 2026 | DSIT/DBT strategic letters to regulators (Jan 2026) — How will regulators enable safe AI-powered innovation: joint letter from DSIT Secretary of State and DBT Secretary of State | Final |
| Nov 24, 2025 | PRA AI/ML model-risk roundtable (Nov 2025) — The PRA holds model risk management roundtable on artificial intelligence and machine learning technologies | Final |
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