This article is from the source 'guardian' and was first published or seen on . The next check for changes will be
You can find the current article at its original source at https://www.theguardian.com/business/2025/aug/24/britain-acute-challenges-andrew-bailey-jackson-hole
The article has changed 4 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| UK faces ‘acute challenge’ from weak growth and shrinking workforce, says Andrew Bailey | UK faces ‘acute challenge’ from weak growth and shrinking workforce, says Andrew Bailey |
| (3 days later) | |
| Bank of England governor tells Jackson Hole summit that ageing population is adding to the squeeze | Bank of England governor tells Jackson Hole summit that ageing population is adding to the squeeze |
| Britain faces an “acute challenge” from its weak underlying economic growth and a drop in the number of workers since the pandemic, according to the Bank of England governor, Andrew Bailey. | Britain faces an “acute challenge” from its weak underlying economic growth and a drop in the number of workers since the pandemic, according to the Bank of England governor, Andrew Bailey. |
| A rise in the number of people defined as long-term sick and a big drop in young people in work – factors that he suggested might be intertwined – added to the squeeze created by an ageing population. | A rise in the number of people defined as long-term sick and a big drop in young people in work – factors that he suggested might be intertwined – added to the squeeze created by an ageing population. |
| This increased the need for efforts to boost economic productivity, Bailey told the gathering of leading policymakers in Jackson Hole, Wyoming, at the weekend. | This increased the need for efforts to boost economic productivity, Bailey told the gathering of leading policymakers in Jackson Hole, Wyoming, at the weekend. |
| The emphasis needed to be on raising productivity growth, Bailey said. “Ageing is not going to turn around in the foreseeable future.” By 2121, about 40% of the UK adult population will be over 64. | |
| He said the Bank of England had turned its focus away from long-term trends in unemployment to look instead at levels of labour force participation. | He said the Bank of England had turned its focus away from long-term trends in unemployment to look instead at levels of labour force participation. |
| Official data shows that the percentage of 16- 64-year-olds active in Britain’s labour market is lower than before the Covid-19 pandemic, unlike in other advanced economies. Mental health was the most common reason for being inactive, a point he described as “a very concerning development”. | Official data shows that the percentage of 16- 64-year-olds active in Britain’s labour market is lower than before the Covid-19 pandemic, unlike in other advanced economies. Mental health was the most common reason for being inactive, a point he described as “a very concerning development”. |
| Bailey added that there were caveats around the data, including a low response rate and the possibility that the economically inactive might be more likely to take part in official surveys. | Bailey added that there were caveats around the data, including a low response rate and the possibility that the economically inactive might be more likely to take part in official surveys. |
| But he did not think this factor explained all the decline. “Data caveats aside, this is a pretty sad story for the UK because … we are well at the bottom of the league table,” he said. | But he did not think this factor explained all the decline. “Data caveats aside, this is a pretty sad story for the UK because … we are well at the bottom of the league table,” he said. |
| The government has pledged to boost labour force participation and economic growth, but earlier this year MPs rejected reforms to disability benefits, which some analysts say discourage people from work. | The government has pledged to boost labour force participation and economic growth, but earlier this year MPs rejected reforms to disability benefits, which some analysts say discourage people from work. |
| Data for the second quarter of 2025 showed that 21% of Britons aged 16-64 are neither in work nor actively seeking a job, down from a peak of 22.2% last year but above a low of 20.3% before the pandemic. | Data for the second quarter of 2025 showed that 21% of Britons aged 16-64 are neither in work nor actively seeking a job, down from a peak of 22.2% last year but above a low of 20.3% before the pandemic. |
| Reduced labour force participation is one reason why some Bank of England policymakers fear that Britain’s inflation rate – the highest in the G7 at 3.8% in July – may be slow to return to its 2% target. | Reduced labour force participation is one reason why some Bank of England policymakers fear that Britain’s inflation rate – the highest in the G7 at 3.8% in July – may be slow to return to its 2% target. |
| The latest official data showed the UK economy grew at a faster rate than expected in the second quarter, despite a slowdown from a strong start to the year amid pressure from tax increases and Donald Trump’s global trade war. | |
| Sign up to Business Today | Sign up to Business Today |
| Get set for the working day – we'll point you to all the business news and analysis you need every morning | Get set for the working day – we'll point you to all the business news and analysis you need every morning |
| after newsletter promotion | after newsletter promotion |
| The Office for National Statistics figures showed that growth in gross domestic product slowed to 0.3% in the three months to the end of June, down from a rate of 0.7% in the first quarter. | The Office for National Statistics figures showed that growth in gross domestic product slowed to 0.3% in the three months to the end of June, down from a rate of 0.7% in the first quarter. |
| Although it beat forecasts by City economists for a slowdown to 0.1%, the weak reading underscores the challenge for the chancellor, Rachel Reeves, as she considers options for boosting the economy and raising revenues at her autumn budget. | Although it beat forecasts by City economists for a slowdown to 0.1%, the weak reading underscores the challenge for the chancellor, Rachel Reeves, as she considers options for boosting the economy and raising revenues at her autumn budget. |
| This article was amended on 27 August 2025. An earlier version said that Andrew Bailey said that by 2040, 40% of the UK population will be older than 64. In fact, his presentation showed that by 2121, about 40% of the UK adult population will be over 64. |