Friday, September 29, 2017

Inflation May Go Up Once UK Immigration Numbers Go Down

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For every action, there is an equal and opposite reaction. That is a law in physics and it is quite applicable in real life. So when the United Kingdom government is quite keen on pushing the numbers down for immigration, the nation can definitely expect that something will happen once this comes true. There are plenty of scenarios that could happen if one thinks about it. However, looking at the statistics and the situation, the best possible scenario is that inflation numbers may go up once the numbers for immigration in the UK go down. And this is not just a guess - it is based on numbers and facts.

The study on the possible effect of a cut in immigration numbers has been done by an expert as the concern on the effects has been quite alarming. After all, Britain has been quite open to immigration and has not been bothered by the numbers. Once a limit is put in place, this would mean a lot less movement in the country and that could bring about drastic changes.

The effect on wages and inflation

The plan of the current UK government is to go through with exiting the European Union so that the country would once again have control over the borders and also be able to control the number of immigrants coming in and out of the country. If this pushes through, this would mean that the immigrants coming to the country would be a lot less. A possible consequence for the drastic fall in immigration would be wages going up since there are a lot less workers coming in. However, it may also bring about a rise in inflation for a short period.

This study has been done by the Bank of England’s governor, Mark Carney. He wanted to look at how the immigration cut would actually affect the economy of Britain. The study that he did also reflected that an immigration limit would also push for higher interest rates and this is something that has not happened for a decade.

The other possible effects

Carney continued to disclose that a sharp decrease in immigrant numbers may also bring about businesses having employee shortages. Businesses could suffer because of this and it should also quite affect the economy of the country. A huge portion of businesses in the United Kingdom have been more than reliant on immigrant labor. What could happen if the cut pushes through is that businesses would be short-staffed. The only way for them to cope would be to have shorter business hours or just push through understaffed. Both are definitely not good for any business.

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