Bank of England Governor Bailey: The UK is facing challenges in raising its potential growth rate.

Andrew Bailey, Governor of the Bank of England, stated that as long as the labor force participation rate continues to be low, the UK will face a "serious challenge" in increasing its economic potential growth rate. Bailey, speaking at the Federal Reserve's Jackson Hole symposium, told central bank officials from various countries that the issue in the UK labor market is no longer just unemployment, but rather the labor force participation rate. He emphasized that unless more British people re-enter the labor market, there must be a greater focus on productivity growth to boost the economy. Bailey said on Saturday that weak productivity, combined with low labor force participation, are causing the UK to face a "serious challenge in increasing its potential growth rate." "This is a rather regrettable situation for the UK," he added. Data from the UK's Office for National Statistics shows that since the pandemic, the UK has been plagued by issues of labor force outflow, leading to a recent decline in GDP per capita.