Evaluating the contemporary business environment

This report evaluates the contemporary business environment of the UK, focusing on the economic impacts of COVID-19, measures taken by the government, response of Bank of England, and impacts of Brexit on UK's economy. It also provides recommendations for the same. The subject is not mentioned. Get study material, solved assignments, essays, and dissertations on Desklib.

CONTEMPORARY
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Economic impacts of the COVID pandemic on UK's economy.................................................3
The measures taken by the UK's government.............................................................................4
Analysing the response of the bank of England along with their implication on UK's economy
.....................................................................................................................................................7
The impacts of Brexit on the UK's economy..............................................................................8
Recommendations.......................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Contemporary business environment is that business environment which belongs to the
same period. It is that business environment which keeps changing at very fast rate. These
change in the environment highly affects the economy of the country, the present status of the
business in the market affects the economic status of the society. Recently, the COVID pandemic
has affected the contemporary business environment of the UK. In result, the economic stability
of the UK has been highly influenced by this. The pandemic has been proven as a disaster for the
nation's economy. In order to handle this, there were certain measures taken by the government.
The report will illustrate the economic impacts of the COVID on UK's economy and the
measures taken by the government towards it. Apart from this, the report also highlights the
response of the England's bank during the time of the pandemic. The impacts of Brexit on the
UK economy has also been mention in this report.
MAIN BODY
Economic impacts of the COVID pandemic on UK's economy
The pandemic has affected the economy of the country in various ways, which are:
The construction activities of the country remained under operation. Most of the projects
under construction and property has to be stopped in order to maintain social distancing. The
safety of the workers has given the major priority. The government passed an order about
stopping the work till the situation is not control. Due to this, the demand for the raw materials
has been reduced. Along with this the operational process gets a pause. The global revenue of the
country highly gets affected by this. (Nune and et.al., 2021). When the contractors got an order
of restarting the operations the situation of the economy was not so good as due to delay of the
projects, the cost of the production has increased along with this, the availability of the labour
was on a low rate. There was an overall drop under the productivity level of the economy.
The food retail sector of the UK decided to supply the food in situation of panic buying.
The online demand by the consumer increased on a high note. Firms such as Tesco and
Sainsbury started their offline deliveries as the online deliveries were not easy to met by them.
There was high demand by the customers but, the supply was low in comparison of the demand.
The production process was not ongoing. The firms were sailing their inventory stock in order to

meet-up the demands. The situation of “supply not meeting demand” has occurred. Purchasing
power of the people became limited. Less purchasing results in the less generation of the revenue
which further results in less flow of cash in the economy.
The famous companies of the UK that has been listed on the top of the London stock
market has lost their position. These companies were consistently contributing in the GDP of the
nation. The shares of the companies has fallen down as at the time of crisis, no-one was investing
in the business associations. The situation became worst. No investment leads to no operation
which further leads to less financial stability. The contribution of the firms in GDP became less.
Many people give up their jobs due to the pandemic as there was no project ongoing in the
companies sector. It has been found from various sources that the GDP of the UK was reduced
by 9.8% in 2020. The lock down results in decreasing the liquidity of cash in the market.
The level of employment was declining in the UK. It has been found from various studies
that, at the time of pandemic all the sectors which are primary, secondary and territory sectors
has shown up the high declination in terms of operating activities. (Zala and et.al., 2020). To
maintain economy, the inflow and outflow of the cash is required. There was no generation of
income taking place. The income status graph of all the three major sectors defines the financial
stability graph of the economy. Thus, the less production implies low income and less
employment.
The measures taken by the UK's government
There were certain measures taken by the government in order to handle the drastic situation
occurred due to COVID:
Employment related measures- The government introduced certain schemes under this in order
to maintain the situation and those are.
JRS- This stands for job retention scheme. This scheme was introduces for those employees who
were not able to maintain their current operational process due to the pandemic. Under this, the
eligible employers can easily apply towards the HMRC for taking a favour in terms of reducing
the employment cost. (Duarte and et.al., 2021). This scheme was scheduled in the march 2021
and these was valid till the end of the October. To become eligible for this scheme, the employee
must be on payroll and then government provides the 70-80% wages to them.

Kickstart schemes- this plan was especially for the 16-24 aged people. This scheme was
introduces in order to solve the crisis of the long-term unemployment. Under this, the
government was bearing up the obligation of first six months employment cost in terms of wages
for the fresher ones. The administration also covering the cost of pension and insurance plans of
the employer.
Apprentice schemes- The government offers the proposal to firm related to the hiring of the
people. The firm who hire people of aged 16-24 gets amount of 2000 while the firms that hires
the people aged 25 or above that gets amount of 1500.
Traineeship schemes- Under this, the firms receives the amount of 1000 for every new
traineeship placement.
SSP- The SSP stands for the statutory sick payment. Under this, any employee who has the
symptoms of COVID has been advised for self-isolation. During the self-isolation, the employer
gets the payment from the firms.
These measures in terms of employment related measures helps in the creation of the
employment in the economy. Many operations re-started by the firms and many new people were
employed by them. In result the economic stability of the country was regaining.
Economic measures- This measures was taken in relation of debt payments and loan, it
includes:
 The companies who were on a high growth rate for over a long period, the government
decides to provide them future fund during the time of crisis so the companies can
perform their task. (Brewer and Gardiner, 2020). The administration became the investor
for such companies.
 Bounce back loans for the small firm has been introduced. Under this, the firms operating
on small scale has given the benefit of taking loan worth up 25% of their final turnover.
And the time period of paying this loan starts after 12 months.
 The funding has been done by the government for the charity. The assurance is provided
by the administration to focus over those people who are homeless.
 Coronavirus large interruption loan schemes announced by the government. Under this,
companies with the turnover of 25 million can take the loan of 5 million. On the other
hand, the companies with the turnover of 250 million can take the loan of 50 million.

These steps under the economic measures sets up a base for the companies to restart their
production activities and generate more revenue so the inflow and outflow of the cash can be
maintained.
Custom measures- These measures are taken for the self-employment generation income. It
includes.
 The people who are self-employed and got highly affected by the crisis. For such people
the government provides a taxable grant of 80% of their average monthly profit of last
three years.
 The self-employed people whose profit is not more than 50,000 are eligible for this
scheme.
Measures for easing the lock down- There were certain measures taken by the administration in
order to reduce the problems occurring by the lock down and that involves:
 The recovering strategy has been adopted, under this, the people who are not able to do
work from home can easily go to their workplaces and perform their task along with
maintaining the social distancing.
 The government took the decision of reopening the retail stores and primary schools.
 Those business who are ready to meet the COVID guidelines can open up their
businesses and perform their activities.
 The primary strategy of the administration under this was to maintain the social-
distancing.
Education measures- These was taken in the favour of the students and the teachers. It involves:
 The online classes have been started for the students in order to achieve the learning. The
students adopted the new way of learning through technology.
 An assurance was made to the teachers in terms of giving full payment while teaching
from the home. (Izzeldin and et.al., 2021). This has been done in order to maintain social
distancing.
Tax measures- it has been taken in order to maintain the direct and indirect taxes. It includes:
 The rates of taxes deducted by the government. It was becoming hard to pay taxes for the
organizations as there was less operational activities processing by them.

 The cost of production was increasing and paying taxes along with this was a hard task.
Therefore, government provides an ease in paying of taxes. So the cost of production
remains less.
Vaccination measures- It was taken with an aim of reducing the effect of pandemic over the
people. This involves:
 Higher authorities of the UK completely focused on providing the vaccination to the
people. The vaccination was made compulsory by the government.
 The government kept a keen focus on the arriving of vaccination doses in the healthcare
centres of the UK.
The government of the UK performed various measures in order to handle the loos occurred due
to the crisis. All these steps of the administration contributed in regaining the economy stability
of the country. The various measures in terms of providing financial help to the business leads to
the starting of operational activities. (Mitchell and et.al., 2020). And this results in the revenue
generation. The measures related to employment issues results in providing the job to the
unemployed people. Vaccination measures provided an assurance of safety and better health to
the people.
Analysing the response of the bank of England along with their implication on UK's economy
The bank of England provides high support to the government of UK by following manner:
The MPC reduces the bank rate and offers the new term funding schemes with other extra
incentives. Under this, the monetary policy committee decided to reduce the bank rate up to the
0.25%. The bank provided additional incentives to the small and medium scale business by
providing them fund in order to carry on their activities. Deduction in the bank rate results in
supporting the business and consumers in such difficult times. It has been done in order to reduce
the cost of the business and increasing the availability of the finance.
In terms of initiating the credit supply, the FPC reduces the capital buffer rate to the 0%.
The business organization can easily take the loan and after the completion of 12 months the
interest rate has been charged. (Uddin and et.al., 2021). This has been done in order to handle the
current scenario of the UK's economy. The bank was ready to face obstacles in order to supply
credit for influencing the stability of the UK's economy. Large rate of credit supplies has been
done by the bank so, the business and households can meet-up their temporary issues.

The bank closely worked with the government in order support large business
organizations. The support is given through offering the cash to the organizations for their
corporate debt. This results in helping them in terms of paying wages and covering the cost of
production. The bank provides an ease in repayment of the existing loans. Due to this, the large
organization was only focusing on starting their production process. The issues related to wages
and cost of raw materials has been sorted out by the bank in terms of providing fund.
The bank offers the proposal to the government in terms of giving funds for those people
who are homeless. The bank provided fund to the government and then the administration used
that fund in the charity. (Giovannini, 2021). Due to this, the large number of people get the
facility of living and fulfilling their basic needs. The bank not only helped the people of the
country, along with this the support has been given to the government. The bank provides large
number of fund to the government so, they can use it where it is required in the meet-up of the
crisis. Bank acts as shareholder for those companies who was falling down at the share market.
By performing these steps, the bank increases the cash flow in the economy. The
investment by the bank in different organizations helped them to perform their task and in
generating the income. The economy is said to be stable only when there is the inflow and
outflow of the cash takes place. At the time of crisis, the England's bank provided the highest
support to the people, government and the economy. The approach of reducing the interest rate
leads to the higher credit supply and which again leads to the high efficiency of the credit in the
market.
The impacts of Brexit on the UK's economy
Brexit is the mixture of the term British and exit. It was the situation under which the UK has
been withdrawal from the EU. Under this, trade restriction has been faced by the UK. Many
businesses shift their headquarters to the EU. The Brexit has affected the UK's economy in these
ways:
Growth- Brexit highly impacted the growth of economy in the UK. The economy is going
downward due to this. The imports are on a high note but the exports are on a low note. This
results in erasing the stability of the economy. (Puri and et.al., 2020). During the time of COVID
crisis, the Brexit affected the growth of economy on a high level. The businesses were facing

loss and the prices of imports were increasing. The liquidity of the cash was reducing. Due to the
Brexit, UK was unable to make trade with certain countries at the time of pandemic.
Jobs- There was the shortage of the jobs after the Brexit. The labourers are unable to find the
job. Less job results in less employment opportunities. The economy shows deduction in terms
of having employed people. COVID has made this much hard for the UK. Already due to Brexit
there was shortage of job and at the time of pandemic the ratio of less job opportunities was high.
This has mainly affected the people of low and medium skilled occupation.
Movement of companies- Many companies shifted their business operations and offices out of
the Britain. These companies followed the Brexit in terms of performing their task. Due to this,
heavy loss is faced by the UK. Those business were contributing highly in the GDP of the UK.
The movement of these companies results in the less GDP for the UK. (Tammes, 2020). And this
loss gets double at the time of pandemic. In the past, there was already many companies shifted
from the UK and the pandemic was creating less opportunities of business for the existing
companies of the UK.
Stock market- The London stock exchange shows a high rate of declination just after the Brexit.
The shares had been uplifted from the UK's companies. The organizations remained with less
business investment. Less investment resulted in less business operations. Somehow, the
companies managed this situation. But, the COVID crisis made them to face this situation again.
Economy and business- The business and the economy are interrelated concept. Factors
affecting business will ultimately affect the economy and the elements affecting the economy
will ultimately affect the business. Brexit affected both of them. (Harari, 2020). The business
provided lower growth opportunities after the Brexit and ultimately the economy went down.
Declining in the rate of the economy resulted in the less productivity of the economy. Many
people became jobless. The economy of the UK have been through tough times after the Brexit
as the liquidity was low in terms of cash. During the period of COVID crisis, the UK has faced
this situation again. The economy again went down because of the less business operations. The
UK managed to cop-up with this crisis.
Recommendations
The government of UK has performed all the measures in effective manner throughout the
COVID. Certain measures taken by them has been proven efficient in terms maintaining the
stability of the economy. The bank of England provided complete support to the UK during the

hard times. In my recommendation, the government can some more steps in order to maintain the
stability of the economy and those are:
 Opening up of various public projects. The public projects by the government helps in the
creation of employment. After some time, the government can even change that public
project into private project by performing the concept of privatisation.
 The effective budget policy should be made by the government so, at the time of hard
times the situations can be managed and the stability of the economy can be maintained.
 A complete check over the monetary and fiscal policy is required in order to maintain the
cash flow in the economy. The government should put focus on this element throughout
the year instead of only focusing on the hard times.
By focusing on things that has been mentioned above, the government can add more
effectiveness in the process of making economy stable.

CONCLUSION
From the above report, it has been concluded that the business plays an important role in
maintaining the stability of the economy. The activities of the business generates the cash flow in
the economy. This rate of cash flow in the economy describes about the stability of the economy.
The report also describes the effective measures taken by the government of the UK in order to
maintain the impacts of COVID over the economy. The bank of the England helped in gaining
and reshaping the economy of UK. Bank has provided the support to the country's economy in
various ways. The report also highlighted the drastic situation occurred due to Brexit. And the
effects of these situations over the economy of UK. Apart from these, recommendations has been
given in order to make the status of the economy more stable.

REFERENCES
Books and Journals
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household incomes. Oxford Review of Economic Policy. 36(Supplement_1), pp.S187-
S199.
Duarte, A., and et.al., 2021. Jointly Modelling Economics and Epidemiology to Support Public
Policy Decisions for the COVID-19 Response: A Review of UK
Studies. PharmacoEconomics, pp.1-9.
Giovannini, A., 2021. In the eye of the storm: English local government and the COVID-19
crisis. In Living with Pandemics. Edward Elgar Publishing.
Harari, D., 2020. Slowing economic growth, Brexit and the productivity challenge. Insights,
p.70.
Izzeldin, M., and et.al., 2021. The impact of Covid-19 on G7 stock markets volatility: Evidence
from a ST-HAR model. International Review of Financial Analysis. 74. p.101671.
Mitchell, R., and et.al., 2020. The impact of COVID-19 on the UK fresh food supply
chain. arXiv preprint arXiv:2006.00279.
Nune, A., and et.al., 2021. Impact of COVID-19 on rheumatology practice in the UK—a pan-
regional rheumatology survey. Clinical rheumatology, pp.1-6.
Puri, N.,and et.al., 2020. COVID-19: UK Government’s latest measures to support businesses.
Tammes, P., 2020. Social distancing, population density, and spread of COVID-19 in England: a
longitudinal study. BJGP open. 4(3).
Uddin, S., and et.al., 2021. Onslaught of Covid-19: how did governments react and at what point
of the crisis?. Population Health Management. 24(1). pp.13-19.
Zala, D., and et.al., 2020. Costing the COVID-19 pandemic: an exploratory economic evaluation
of hypothetical suppression policy in the United Kingdom. Value in Health. 23(11).
pp.1432-1437.