Bank of England Governor Andrew Bailey stated Monday that the UK is not expected to return to its 2% inflation target until 2027.

Speaking at the University of Leicester, Bailey addressed the long-term challenges facing economic growth and monetary policy, pointing to persistent weak productivity and demographic shifts as key headwinds.

Bailey explained that low and stable inflation is critical to sustainable growth, but recent shocks like COVID-19 and the war in Ukraine have hampered labor supply and productivity. "The story of growth is, I am afraid, quite clear. It has slowed markedly in the last fifteen years or so, and this has affected the advance of living standards," he said.