Bank of England governor warns on youth worklessness

By the Editorial Team · Wednesday, June 3, 2026

Bank of England Governor Andrew Bailey warned lawmakers that rising youth unemployment combined with an ageing population poses a serious threat to the UK's economic stability. He highlighted that without intervention, this demographic imbalance could increase fiscal pressures and complicate efforts to control inflation amid global uncertainties.

The governor of the Bank of England, Andrew Bailey, cautioned lawmakers on the escalating challenge posed by increasing youth worklessness amid Britain’s ageing population. Addressing the House of Lords Economic Affairs Committee, Bailey described the situation as a “very important and very serious issue,” highlighting concerns about the long-term economic consequences.

Bailey’s remarks came shortly after data revealed that the number of young people aged 16 to 24 classified as not in employment, education, or training (NEETs) has surpassed one million for the first time in over a decade. This rise has raised alarm among policymakers and experts, including former Labour Cabinet minister Alan Milburn, who warned that without intervention, the country risks creating a “lost generation.”

The governor emphasized the dual challenge facing the UK: an ageing population, driven by lower birth rates and increased life expectancy, is intensifying pressure on the workforce. As more individuals retire, a smaller proportion of working-age people is responsible for supporting both older pensioners and younger generations who may be economically inactive. Bailey cautioned that if a significant segment of the working-age population remains outside the labour market, this demographic imbalance could exacerbate fiscal and social strains.

“Combining an ageing population with lower youth labour participation is very substantial,” Bailey said. “If you combine those two things together, I think that’s a very important and very serious issue.” He noted that the growing dependency ratio could lead to increased taxation and social welfare burdens on employed individuals, complicating efforts to maintain economic stability.

In addition to the structural concerns, Bailey addressed near-term economic challenges, citing the ongoing conflict in Iran as a driver of rising energy prices and inflationary pressures. He described the current situation as “enormously frustrating,” underscoring that inflation has remained above the Bank’s 2% target, standing at 2.8%, with expectations that it may rise further in the coming months.

Bailey also declined to rule out the possibility of a recession, signaling uncertainty about the UK’s economic trajectory amid international geopolitical tensions and domestic labour market issues. His comments suggest that policymakers will need to carefully navigate both immediate economic risks and longer-term demographic shifts to safeguard the country’s financial health.

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