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Due to global issues such as the aftermath of the coronavirus pandemic, the rising price of oil, and the war between Russia and Ukraine, the world is facing a cost-of-living crisis. Broadly defining it, we are referring to the rising costs of everyday essentials such as food and fuel, which are outpacing wage growth. This means that people are having to spend a greater proportion of their income just to maintain their current standard of living.
Of course, the cost-of-living crisis is not only affecting individuals but also businesses and the wider economy. In this blog, we'll look at some of the ways in which the cost-of-living crisis is affecting the world financial markets and how an MSc in Accountancy and Financial Management at the University of Bolton can help improve your understanding of it.
Defined as an increase in the prices of goods and services in an economy over a period of time, inflation is one of the most direct effects of the cost-of-living crisis. When inflation increases, this means that the purchasing power of consumers decreases because they cannot buy as much with their money; meaning that inflation erodes the value of money.
The increase in inflation can be explained by various reasons. For instance, are yourself or your family struggling with the rising fuel prices? This is a big reason for the inflation increase, and one that has been building since the first noticeable increase in oil price in 2014. By causing the prices of transportation and energy to go up, this in turn has caused the prices of other goods and services to increase as well. Another reason for inflation is that there has been an increase in demand for goods and services due to population growth. As more people want to purchase items, businesses raise their prices in order to make more profit.
Global consumer spending has already started to fall as people try to tighten their belts in light of the current situation. This is likely to continue in the short term as people adjust their spending habits accordingly. However, there could be some longer-term effects as well. If wages don’t start increasing at a faster rate or if prices continue to rise, then consumers will continue to live with a low level of disposable income; causing a negative effect on global economies as consumer spending is a key driver of economic health.
The impact of rising inflation rates and decreased consumer spending levels are negatively affecting people’s ability to save money; which is driving up interest rates. To put this into context, the current interest rate in the UK is 3%; an increase from its all-time low of 0.10% at the start of the coronavirus pandemic in March 2020. A core reason for this is due to wages not keeping up with the increasing cost of living. This means that consumers have less spare income to place in their savings accounts, and when they do, the rising interest rates mean that they can’t get a good return on their savings. In turn, this is causing more people to turn to debt to finance their lives, which is having an even worse effect on interest rates.
MSc Accountancy and Financial Management at the University of Bolton
If you’re in your final year of your undergraduate accountancy degree or are looking to enhance your career prospects in a demanding sector, then an MSc in Accountancy and Financial Management at Bolton University could be a great choice.
By offering our students a course that is aimed at professionals working in the business, accountancy, and finance sectors, the course focuses on the core principles of these key areas, as well as covering wider management issues in advanced financial and performance management, and advanced taxation.
With all our lecturers being qualified with either a masters, PhD, or professional accountancy qualification, as well as their extensive industry experience, this puts us in a leading position to be able to offer students the quality teaching they deserve to graduate with an accredited degree. Helping them pursue their journey towards becoming a reputable professional in the industry with excellent employment opportunities.
If the University of Bolton sounds like the right place to take your master’s degree, then view our full course details by clicking here to find out how to apply.
Alternatively, for more information, please contact us at email@example.com or call us on 01204 903807.