An update to our modelling of the English undergraduate tuition fee cap’s real terms value decline, based on the Bank of England’s latest CPI forecasts.
The BoE expects inflation to fall faster this year than it previously thought, though news today that CPI in March unexpectedly remained the wrong side of 10% may give pause for thought.
Of course, the C in CPI stands for Consumer. This rate represents costs for individuals, not universities. Whilst we might expect the two to move together fairly closely, a significant factor in the revision to the BoE’s forecasts for this year is the government’s changing interventions in residential energy costs. The Energy Price Guarantee doesn’t cover the commercial energy market of course, so these interventions won’t have a direct benefit for university balance sheets.