Some Effects Of Demographic Change On The UK Economy - Speech Given By Michael Saunders, External MPC Member, Bank Of England, CBI Annual Economic Dinner 2018, MacDonald Bath Spa Hotel, 22 November 2018

The UK is experiencing major demographic changes from population ageing, reflecting rising life expectancy and the maturing baby boom generation. These trends probably do not significantly affect the economy’s growth rate from quarter to quarter. But demographic trends are causing deep structural changes in the economy. In the last 10-15 years, these effects from population ageing have been fairly benign, reducing the equilibrium jobless rate and neutral interest rate. However, effects of population ageing will become more challenging in the next 5-10 years, with greater downward effects on labour supply and, possibly, productivity. If the UK is to avoid a further slowdown in potential economic growth, productivity growth will need to pick up, which will probably require continued investment in physical and human capital.

Some effects of demographic change on the UK economy