Evaluating the Contemporary Business Environment

EVALUATING THE
CONTEMPORARY
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION.........................................................................................................................3
TASK..............................................................................................................................................3
Economic impact of COVID-19 on UK economy......................................................................3
Major economic response of UK government and their economic implications........................4
Major response of Bank of England and their implications to UK economy..............................7
Impacts of Brexit on UK economy..............................................................................................8
Recommendations......................................................................................................................10
CONCLUSION............................................................................................................................10
REFERENCES............................................................................................................................12

INTRODUCTION
Business environment is the composition of people, business and other forces within an
industry which can create an impact on the operations and functions of business. Business
environment involves internal and external factors which are responsible for influencing the
operations of business (Business environment, 2021). Business environment encompasses
various factors which are responsible for driving opportunities and can possess threat against the
functioning of business. Understanding and evaluating business environment is helpful as this
helps in managing all resources effectively, identifying opportunities, involves in strategic
planning, enhance business performance and profitability. This project report will outline the
impact of global pandemic, COVID-19 on the economy of UK. The study will define the
responses of UK government and Bank of England and their implication of strategies in UK. The
research will also highlight the impact of Brexit on the economy of UK and will suggest some
strategies which will be helpful in enhancing the economic position of the country.
TASK
Economic impact of COVID-19 on UK economy
Economic impact of global pandemic on UK has been highly destructive as this has
created an impact on employment, financial market, travel and other industries. The global
pandemic has been a cause of market instability, increased unemployment, decline in
government income, collapse of many industries and reduction in consumer activities. The
economy of UK has been highly disruptive since the global pandemic and has faced recession
which has been the effects of lockdown. Economy of UK has seen a 2.3% fall in output in
November due to partial lockdown. The bank of England has forecasted that the economy will
fly by 4% in first prime trimester of 2021 due to imposition of protocols which has been
followed in lockdown and due to Brexit disruptions. The GDP has been declined by 11 % which
led to poor economic performance (UK economy after COVID-19 Hit, 2021). Unemployment has
been increased in various sectors as crisis adversely influenced the overall economy.
The impact of covid-19 on the economy of UK faced long term consequences in various
sectors such as- health, accelerated spread of technology, acquisition of skill and led to highly
uncertain economy. The pandemic has not only affected the economy, it has created an adverse

impact on the political climate which have led to many disputes and chaos in UK. The global
pandemic covid-19 has given economic shock to world economy and this has led to fall in
economic position of UK by 3.5% in 2020 (International economic cooperation, 2021). The
magnitude of recession due to pandemic in modern times is unprecedented. The GDP has seen a
large decline in 2020 by around 9.8 %. The pandemic has affected different sectors of the
economy of UK at different degrees sectors such as social contact which includes hospitality and
entertainment services are also badly affected due to pandemic.
COVID-19 has made the economy face huge breakout challenges which are based on
health, industrial organization, macroeconomics, finances, history, development, political
economy and public finances. As a consequence, economy of UK has seen dramatic hit and fall
where service industry has compromised 79% of UK economy while production and
construction company has seen a fall at 13.9% and 6.4%. education has fallen by 1% in
December 2020 which has been a long-term adverse impact om the economy of UK.
Major economic response of UK government and their economic implications
Government has adopted a variety of public health and economic initiatives in response
to the COVID-19 pandemic in the United Kingdom. The COVID-19 pandemic began in January
2020, prompting the UK to issue travel warnings for tourists from affected countries in late
January and February 2020, as well as to begin contact tracing. As the virus spread throughout
the country in the following weeks, officials progressively placed further social restrictions on
the public, first rejecting harsher measures adopted elsewhere in Europe and Asia. Due to a
growing number of limitations, a number of economic aid measures that were set to expire have
been extended until the new year, including another national lockdown in England from
November 5 to December 2 (Measures in response to COVID-19, 2020). In addition to dealing
with the health and economic consequences of the COVID-19 pandemic, the UK government is
negotiating with the EU to extend the Brexit transition period until December 31.
Government initiatives to invest in infrastructure, boost housing availability, and enhance
women's involvement in the labor market will also contribute to more sustainable and inclusive
growth. The UK government has responded by announcing a number of new initiatives and
policy reforms aimed at ensuring stability in the country's pandemic scenario (Barua, 2020).