Contemporary Business Environment: Impact of Lockdown, Government Response, Bank of England and Brexit on UK Economy

Contemporary
Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY .................................................................................................................................3
Explain the main impact of lock-down on economy of UK by using circular flow of income.. 3
What are the major economic response of UK 's government and its impact on UK's circular
flow of income. ..........................................................................................................................4
Illustrate major response of Bank of England and its implication of circular flow of money in
UK. .............................................................................................................................................7
What are the factors likely impacts of Brexit on economy of UK..............................................8
CONCLUSION ...............................................................................................................................9
RECOMMENDATIONS ................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Contemporary business defined as the circumstances and the ideas of current time of the
business environment and that is known as the modern business. It studies that financial
organisational. Market-related & environmental concern which is being faced by the company
and this encompasses the subject of scarcity, distribution and the consumption of goods and
services(Arunprasad and et. al., 2022). Due to huge impact of COVID-19 & the Brexit, the
economy of UK have majorly impacted and influence the overall working of the employees. This
respective report, the influence of pandemic on economy of UK & also analyse the government
have taken the various response to it will further discussed. Moreover, the focus paid on aspects
taken by Bank of England in context to the Covid-19 and also analyse the implications on UK
economy. Lastly, this respective report analyse the immediate and the future impacts of Brexit on
economic aspects of the nation.
MAIN BODY
Explain the main impact of lock-down on UK economy by using circular flow of income.
There is the huge infleuce of COVID-19 on the overall economy of United Nation and
there in many ways. Lock-down restrictions within nation and this has caused the shutdown of
many business, unemployment and the downfall in the GDP, decreasing in the importing and the
exporting of goods and services. There are various sectors which includes the hospitality sector,
tourism sector which is being impacted by COVID-19 restrictions is being impacted by them.
The low demand and supply of given goods leads to get results into less utilization of
capital and the labour so that it leads to reduce the capital income also leads to minimise the
profitability in various sector and the companies. When there is reduction in the existing capital
expenditure of the business then the uncertainty is being occurred. During the pandemic
scenario, this was analysed by the Office For Budget responsibility by which the GDP can fall up
to 35% and on other hand, national Institute of Economic and Social Research is being analysed
to fall-down between 15-25%.
Furlough employees will be classified as the remaining in employment when the working
hours of them become zero. This is being analysed in which there might be an better influence on
the employment of UK and unemployment rate. It is also affected that the COVID-19 affect the
gross trade flows which reduces the level of external demand & any minimisation in the

demands' trade intensity. In order to fight with the pandemic & concern for the economy, the
government had spend funds by which the that the of money which is incurred I taxes that it
leads to reduce and resulted in the borrowing of money.
In the month of April 2020, the overall borrowing of the country is approx. £299 billion
that was huge amount that the nation has borrowed since 1946 and it is also estimated that the
debt of the country is approximately £2trillion(Covid-19 drives UK national debt to £2tn for
first time, 2021). As per the report of Office for National Statistics, the net debt of general public
sector also raised by £2,004 billion and it is being estimated in the month of July which is
estimated from £227.6 billion over the past years that is raised the overall debt by 100.5% of
gross domestic products.
The lock-down restrictions has the great impact on business in UK. The hospitality sector
had a great lost almost 660, 000 jobs in the year of 2020. As per the National Statistics stated in
their continuous update which one in seven ventures are supported to have huge loose in the last
2 weeks of October. It is also estimated that the 22% of the overall working people has been
furlough as of this global pandemic. 73% of were from lodging & food services where 46% and
on other hand, from construction industry.
What are the main response of UK 's government on economy and its impact on UK's circular
flow of income.
There is the continuous rise in the Covid-19 cases in the United Kingdom during the
second wave after fighting with the first wave. As the government of UK have implemented the
certain restrictions that includes the social distancing, restriction on travelling, shut-down in
entrainment industry and essential shops and hospitality industry and the increasing testing of
Covid-19(Caldwell and Akintunde, 2022). In context to 2020, the overall economy of UK was
shrunk is approximately by 9.8%. there is the huge decline in the household consumption and the
business environment even through the regulatory bodies has taken the measures to support the
overall economy. Moreover, the government has implemented tax and spending measures so that
they can support the families that are:
 There are further actions which support the business and also includes the holidays,
payment ofr sick leaves and grant for the small ventures.
 In universal credit, the scheme by expanding the payment of vulnerable individual.
 With the help of charitable trust, funding for NHS and public services.