among adults aged 25 or older, 31 percent in metro centers hold at least a bachelor ’ s degree, versus 17 percent in rural areas ( u. s. census bureau, 2006 ). in some cases, growing urban areas like charlotte are the beneficiaries of a positive dynamic : the city ’ s modern, service - oriented economy attracts skilled and educated workers ; the presence of a skilled workforce attracts new firms to the area and also promotes the development of amenities such as high - end restaurants and cultural activities ; these opportunities and amenities then attract additional highly skilled workers. the challenge of education in north carolina cities like charlotte will probably continue to attract highly educated and skilled workers from other areas of the country, but improving the skills of local workers – especially those displaced by industries in decline – remains critical for both urban and rural areas in the state. four - year institutions play an important role in meeting that challenge, but they are not the sole means for developing workforce skills. for example, in the 2004 - 05 school year, the north carolina community college system served nearly 780, 000 students in fifty - eight institutions. the average community college student in the state is thirty years old and likely working while attending school ( north carolina community college system, 2006 ). because they offer education closely tailored to employer demands in the local workplace, community colleges in north carolina, as elsewhere, play an essential role in training and retraining workers. moreover, they do so at a relatively low cost. in general, we must move beyond the view that education is something that takes place only in k - through - 12 schools and four - year colleges, as important as those are. education and skills must be provided flexibly and to people of any age. i will close my comments on education with a pitch for financial literacy. in today ’ s complex financial marketplace, a basic understanding of financial tools and markets and an appreciation of the need to budget, save, invest, and borrow wisely are critical to the financial health of every individual. the federal reserve is advancing financial literacy locally through the charlotte branch of the federal reserve bank of richmond. the branch has active partnerships with organizations involved in financial literacy and economic education, including among others jump $ tart, junior achievement, lifesmarts, communities in schools, the north carolina council on economic education, and the north carolina bankers association. in short, advancing financial literacy is a high priority at the federal reserve. conclusion i ’ d like to conclude by again expressing my

commentators in recent months. no : raising bank rate will not directly dampen global inflation. but it can ensure that it does not lead to high and persistent domestic inflation. the second upside risk to inflation that i would highlight is if the prolonged period of above target inflation erodes the public ’ s confidence that the mpc will keep inflation close to target. inflation has been above target for 49 out of the past 60 months. over that 5 year period, inflation has averaged 2. 8 %. inflation is likely to remain above target for the next year or so. this suggests that by mid 2012, inflation is likely to have been above target for the best part of six and a half years. yes, it is perfectly possible to explain why inflation has been so high for so long. and yes, there are good reasons why monetary policy did not try to keep inflation closer to target during this period. but just like the judge looking down on me earlier, to some people, at some point, this may just start to sound like a series of excuses. this risk is heightened by the fact that the mpc has consistently under - predicted inflation during this period. it is much easier to be wise after the event. for many people, the one thing about inflation they know with certainty is by how much their cost of living has increased in recent years. and if they take any signal from that about the path of future inflation, this could have significant implications. discussions of mpc credibility are often framed in terms of a set of binary arguments. has the mpc lost its credibility or not? are inflation expectations anchored or de - anchored? this approach encourages a focus on measures of medium - term inflation expectations. the rate of inflation expected over the next year or so may consistently move around since the mpc does not attempt to bring inflation back to target over very short time horizons. but this in the extreme, the law of one price ( loop ) suggests that, in the absence of transport costs and trade barriers, the price of a given commodity will be the same all over the world. even though the loop is unlikely to hold perfectly, the mechanisms underpinning loop might cause a sterling depreciation to lead to an increase in the prices of some domestically produced goods and services. bis central bankers ’ speeches line of argument suggests that the stability of inflation expected 5 or 10 years ahead provides a good metric for judging the credibility of monetary policy. the evidence on medium and long - term measures of inflation expectations