University students will have a bright future in the UK despite expectations of higher inflation in the Bank of England quarterly inflation report released today, according to a leading Sheffield academic.
Dr Mark Bryan, Reader in Economics at the University of Sheffield, says the report shows that the country’s employment prospect is quite good that even with slightly lower growth, students will have a good chance to get jobs.
This also shows that that the Monetary Policy Committee (MPC) is targeting unemployment and University Students will have good prospects.
‘Students should be confident that they have a brighter future,’ he says.
The Bank of England has pushed its inflation expectations above 2% in the following year, while remaining the interest rate at 0.25%. In theory, the lower the interest rate the higher the inflation rate.
Dr Bryan says if the interest rate is kept low, employers and investors can borrow money more cheaply so they can invest more and employ more people. Low interest rates can also increase citizens’ purchasing power to stimulate the economy. So, unemployment rate decreases.
The High Court decision announced today on denying the government the right to trigger Article 50 of the Lisbon Treaty without a vote in Parliament on its own might stimulate the national economy, but it might also increase new uncertainty.
Bank of England Governor Mark Carney describes our economy as a ‘highly flexible and dynamic economy’. These characteristics will make to a new equilibrium as future relationship with the new European Union and new opportunity for the rest of the world.
Dr Bryan says this implies the British economy can react very quickly on different issues and Carney is optimistic about the UK economy in the future.
However, our cost of living will increase by next year due to inflation and it is attributed to the fallen value of sterling. The price of imported goods such as food, wine and clothes will increase.
Mark Carney says ‘the words of monetary policy cannot construct lasting prosperity, but it can help to build a foundation in a sustainable fashion.’
The Bank of England will focus on hitting the inflation target, stabilising growth and supporting employment.