Turnill: BOE Prepared to Tolerate Higher Inflation

The video discusses the Bank of England's willingness to tolerate higher inflation due to economic weakness, highlighting a shift towards looser monetary policy. It compares wage growth and inflation in the UK, noting a gradual increase in wages and a lower unemployment rate. The video also examines factors affecting UK inflation, such as the depreciation of sterling and rising oil prices, which are expected to increase import costs and pressure real wages.

What is the Bank of England's current stance on inflation?

• They are indifferent to inflation changes.

• They are prepared to tolerate higher inflation.

• They are strictly controlling inflation.

• They are reducing interest rates to combat inflation.

How does the current wage growth in the UK compare to inflation?

• Wage growth is lower than inflation.

• Wage growth is equal to inflation.

• Wage growth is higher than inflation.

• Wage growth is not related to inflation.

What has been the impact of wage growth on the UK economy?

• It has encouraged more spending.

• It has decreased consumer confidence.

• It has led to higher unemployment.

• It has had no significant impact.

What are the two main reasons for expected inflation increase in the UK?

• Government spending cuts and tax increases.

• Falling sterling and rising oil prices.

• Rising interest rates and increased exports.

• Decreasing consumer demand and lower wages.

How might real wages be affected by the expected rise in inflation?

• Real wages will not be affected.

• Real wages are likely to come under pressure.

• Real wages will remain stable.

• Real wages are likely to increase.