FCA chief warns of AI risk "on steroids"

Good morning,

The boss of the City watchdog says the rise of AI means the level of risk facing the financial system is “on steroids”. Speaking at a City of London dinner, Nikhil Rathi said “tick-box” rulemaking won’t keep up with increasingly sophisticated threats.

Meanwhile, retail sales have fallen ahead of the Budget next week - down by 0.4 per cent rather than the anticipated 0.1 per cent. Retailers have been sounding the alarm over fears of inflation and rising interest rates, which are both hitting consumer sentiment.

So, here’s everything you need to know this morning. We’ll be back in your inbox at noon with Midday Markets.

Matt

Speaking at a City of London dinner, Nikil Rathi said risks to Britain’s financial markets were graver than ever, urging regulators to avoid adopting “an analogue approach in a digital age”.

“The threats to market integrity are as serious as I have seen them,” the watchdog boss said. “Unprecedented volatility, concentration risks, new forms of market abuse and rampant cross-border financial crime: fast-emerging technologies are putting these on steroids.”

It’s Friday morning and London’s blue-chip index is set for a flat open as pressures on markets persist.

The price of a barrel of oil has surged to $114 per barrel, trading at its highest level in over five months. It follows escalating Houthi attacks on Saudi targets and reports of possible renewed US strikes against Iran raised supply risks in the Middle East.

Last night City AM’s Toast the City Awards celebrated the people and places that make the Square Mile the destination we all love.

More than 300 chefs, restaurateurs and people who run the Square Mile’s cultural venues and green spaces gathered at The Steel Yard for the second annual Toast the City Awards to find out who would win one of our coveted Slice of Toast trophies.

The London-listed firm, which owns Debenhams, Karen Millen and Pretty Little Thing, said its turnaround plans are “significantly ahead” of schedule after producing its first pre-tax profit since 2021. 

Politics is about to get more stark and much more consequential. Business leaders need to be pragmatic, dealing with the government of the day. But it strikes me that in this battle of ideas, they need to stand up for what works – especially when the country we all love is going in the wrong direction, says Liam Halligan.

Sport’s hiking of ticket prices for live sport is completely at odds with many of its marketing efforts and risks alienating future generations of would-be fans, writes Matt Readman.

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