Shafaqna English– In research released on Thursday(20 Aug 2026) by staff at the Bank of England, the International Monetary Fund’s newly appointed chief economist, Silvana Tenreyro, cautioned that while artificial intelligence has the potential to enhance productivity, it is not guaranteed to exert downward pressure on inflation.
On the surface, the proposition is appealing: as productivity improves, the cost of producing each unit of output falls, which logically points to lower prices for consumers. However, as Tenreyro’s research suggests, this straightforward chain of reasoning may not hold in practice, because productivity gains can be absorbed through higher wages, increased profits, or stronger demand—rather than being fully passed on to retail prices.
Source: Reuters