Bank of England Governor Andrew Bailey warned that Britain faces an “acute challenge” in lifting its underlying rate of economic growth because too few people are in work. Speaking at the Federal Reserve’s annual Jackson Hole symposium in Wyoming, Bailey cited an ageing population and an illness-related drop in employment among younger Britons as key drags on productivity. Official figures show 21.0% of 16- to 64-year-olds were economically inactive in the second quarter, down from last year’s 22.2% peak but still above the 20.3% level recorded before the pandemic. Persistent labour shortages, he said, risk entrenching the UK’s 3.8% July inflation rate—currently the highest in the Group of Seven—and slowing progress toward the Bank’s 2% target. Bailey’s comments intensify pressure on Chancellor Rachel Reeves ahead of her autumn budget. Economists quoted in weekend newspapers have likened the fiscal backdrop to the 1970s, warning that surging borrowing costs—reportedly now higher than those of Greece—could force the government to seek an International Monetary Fund bailout unless taxes are raised or spending is cut. The Labour government has pledged to boost participation but recently shelved changes to disability benefits that some analysts deemed necessary to expand the workforce. Bailey urged policymakers to prioritise productivity-enhancing reforms, arguing that “ageing is not going to turn around in the foreseeable future” and that stronger growth is essential for restoring fiscal and price stability.