Amidst the growing emergence of a crisis, including the escalating War in Ukraine, the long term impacts of the pandemic and surging global inflation, the financial world finds itself in a state of ongoing struggle. The impact of these pressing issues reverberates across international markets, posing challenges and uncertainties for economies worldwide including academic institutions in the UK, American scholars in debt and bankers in Europe and on Wall Street.
Wall Street: Job cuts amidst the long term impacts of the Covid-19 pandemic
Many have raised concerns upon the enormous firing rates observed on Wall Street. With the decline in business activities in China and other leading Asian countries, including sales and production, the American job market, including Wall Street, has experienced a significant decrease in hiring rates. As a result, thousands of people have been laid off and are facing challenges in finding new jobs. The impact of the COVID-19 pandemic still remains evident, with many individuals now dealing with a job crisis and often being overqualified for the positions they seek. Despite the initial post-pandemic hiring surge, the largest US banks are projected to cut over 11,000 jobs this year, a move which will cut jobs and cause an even greater crisis on Wall Street.
Biden’s loan forgiveness plan and SCOTUS’ setback
America has also seen a social divide upon Biden’s proposal of loan forgiveness, which despite its economic costs, would help many struggling with their student loan debts. The court's judgement on student loans will put one of Biden's economic policies on hold. The scheme proposed the elimination of up to $10,000 in debt for most individuals earning up to $125,000. It would have cost more than $400 billion, according to the nonpartisan Congressional Budget Office. However, despite the massive support received from scholars all around American universities, student loan debt forgiveness has been rejected by the conservative majority of the Supreme Court and for now, will remain inactive.
Eurozone inflation takes a fortunate 5.5% dive, but core concerns continue to persist
Along with the collection of what may appear to be unfortunate financial news, Europe’s
eurozone inflation has happily fallen to 5.5%; its lowest rate since the start of last year and a significant decrease from 6.1% just in May, an even greater dive than the 5.6% predicted by analysts in a poll conducted by Reuters. On the other hand however, core inflation rose to 5.4% in June, up from 5.3% in May. This was a blow for banking institutions, including the
European Central Bank, which has stated that it will continue to raise rates until underlying price pressures clearly fall below its 2% objective.
English academic institutions grapple with the inflation crisis
Contrary to what may appear optimistic in Central Europe, a serious inflation crisis is visible in the United Kingdom, particularly at the UK academic institutions, including their top Russell Group universities, like Oxford, Cambridge, Imperial College London or London School of Economics. Inflation is increasing operating costs, such as energy bills and salaries, while decreasing the real-terms worth of domestic tuition prices. For a long time, this money was used to finance research, but it is now being used to make up the difference in undergraduate tuition. At the same time, Brexit has deprived UK’s education institutions of access to EU funding streams worth an average of £800 million per year between 2010 and 2020, making the industry even more reliant on international students to balance their finances. Furthermore, those scholarly institutions have seen an average deficit of £2,500 on each domestic student this academic year. According to current projections this figure may reach £5,000 by 2029 and 2030, mirroring the financial crisis that has preceded the introduction of university fees in the mid-1990s.