What happens when you try to grow with fewer hands on deck? The UK faces an "acute challenge" with weak growth and slipping labor force participation, Bank of England Governor Andrew Bailey warned at Jackson Hole. Since the pandemic, the UK's working-age participation rate has remained well below pre-pandemic levels—now 21% of Britons aged 16-64 are out of work or not seeking jobs—much higher than in comparable advanced economies.
The key culprits? An ageing population, rising long-term illness among young people, and lackluster prospects for drawing inactive workers back. This is squeezing industries like insurance, where 64% of brokers report hiring young talent as a top strategic challenge. Wage competition is intensifying as companies scramble for a smaller pool of talent, risking persistent inflation that complicates the BoE’s policy goals.
