At the 2025 Jackson Hole Economic Symposium, Bank of England Governor Andrew Bailey placed the spotlight on the UK’s labour market as a defining challenge for long-term growth. He warned that a shrinking workforce driven by ageing demographics and a post-pandemic drop in participation threatens to constrain productivity and weigh on the economy’s global standing. Bailey urged policymakers to look beyond headline unemployment and focus instead on ways to revive participation and build a more resilient labour supply.
His comments came as central bankers from the U.S., Europe, and Japan gathered to discuss the fragility of economic recovery and the political pressures mounting on monetary institutions. Bailey’s intervention echoed a broader theme of the symposium: central banks are expected to do more than just fight inflation – they must also underpin inclusive, sustainable growth in an era of demographic headwinds.
For the BFSI sector, Bailey’s remarks underscore a shifting policy lens. While markets often focus on rate cuts or monetary easing, the long-term outlook hinges on deeper structural reform. For banks, insurers and asset managers, labour market dynamics are not only macroeconomic indicators but also key to credit health, investment returns and long-term policy direction.
The message from Jackson Hole is clear: without tackling structural weaknesses in labour participation and productivity, monetary policy alone cannot secure growth. For financial leaders, this signals the need to align strategies with a policy environment increasingly driven by workforce and demographic realities.
