Impact of COVID-19 on the UK’s economy

Contemporary Business Environment
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Table of Contents
Introduction......................................................................................................................................3
Impact of COVID-19 on the UK’s economy...................................................................................4
Major economic response of the UK’s government-.......................................................................5
Major responses of the Bank of England and their implications to the UK’s economy-................9
Impact of Brexit on the UK’s economy-.......................................................................................11
Recommendations-........................................................................................................................12
Conclusion-....................................................................................................................................13
References......................................................................................................................................14
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Introduction
The disease of covid 19 has been going on for nearly 2 years now. It originated in China and then
spreaded all over the world slowly. This pandemic made every other country suffer financially,
economically and medically. Similarly, UK also encountered some of problems due to 3 waves
of covid 19 between 2020 and 2021.UK with the help of Bank of England has launched some
schemes in order to provide benefits in the difficult times of deadly virus outbreak of covid 19.
In this report, market economy functions and role of UK government within it will be
discussed. Furthermore, operations of business environment in the UK will be briefly explained.
The major economic response of UK government will also be rigorously explained. Brexit’s
impact on UK government will be thoroughly explained along with responses of Bank of
England and their implication to the UK’s economy.
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Impact of COVID-19 on the UK’s economy
After covid-19, not only UK but the whole world suffered economic instability. Travelling,
Financial marketing and various industries has been suffered from this economic stability.
Various shops, pubs, restaurants, hotels had to face big losses because of pandemic hit.
Following are some sectors which had an impact because of pandemic hit,
Clothing Industry- Pandemic hit had a negative impact on clothing or retail industry
worldwide because they were forced to close down for several months due to imposition
of lockdown worldwide. This same situation was being delt with in UK. Retail industry
had to experience a major downfall because of covid-19.
Food Industry- After pandemic hit, the restaurants were running as usual. But after
imposition of lockdown in UK, all restaurants had to shut down their businesses for
months. This made them suffer and encounter huge losses which ultimately resulted in
fall of GDP and economy. On the other hand, Food retailers like Sainsbury, Morrisons
and Tesco had permissions to be open in UK. Despite being open, there was minimum
supplies from suppliers as there were no manufacturing taking place.
E-Retail Industry- Because of lockdown, there were no supplies in food retail as well as
clothing industry, this made people rely on online shopping. Amazon.com has
encountered huge profits because of this. People preferred buying groceries, clothes and
all the stuff which was important, online. Sales of Amazon took an upward leap.
Amazon attracted its customers by giving various offers which included extra discounts,
one on one free, discount coupon codes for next purchases and many more.
GDP of UK declined by 9.8% in 2020 in this pandemic hit. This was the deadliest drop in UK
economy in last 5 years. After this decline in GDP, UK started to emerge from ashes in 2021.
Early summer of 2021 GDP started to make a strong come back as people were getting back to
their respective works and started to make their valuable contribution towards the economy
again. But, the danger of covid-19 is not eliminated totally. Delta Virus have been evolving
itself and it becoming more dangerous. Tourism sector, which was the most profitable business
of UK faced a downward leap because of deadly virus of covid 19. All countries cancelled
international travelling due to covid 19. This made tourists not able to explore UK, this made
tourism sector encounter huge losses. After loss of 7.6 million jobs, people were out of money
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