Impacts of Covid-19 and Brexit on UK's Economy | Desklib

CONTEMPORARY
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
The main economic impact of Covid-19 on the UK economy....................................................3
Major economic response of UK’s government and their economic implications......................4
Major responses of Bank of England...........................................................................................7
Impacts of Brexit on UK's economy............................................................................................8
CONCLUSION................................................................................................................................9
RECOMMENDATIONS.................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Covid-19 is not only a global pandemic but it is an issue of public health crisis. It has
severely affected the economy and financial markets of United Kingdom. It is evident from the
widespread of Coronavirus, it has the potential in inflicting severe financial and economic costs
on the economies. It has consequentially resulted in reduction of income, rise in unemployment,
disruption in the service, manufacturing industries. It has significantly affected the UK economy
by reduction in productivity, business closure, loss of life, disruption in trade. And also, with the
exit from the European union, it has a major impact on the economy of UK. As with the
restriction on free movement of goods and services, affected the economies growth by reducing
productivity and increasing inflation.
This reports shows the impacts of Covid-19 on the UK economy. It also, show the
responses of the government of UK and its implications. Also, it shows, the measures taken by
the Bank Of England to the impact of the virus. And lastly it shows the impact of Brexit on the
UK economy.
MAIN BODY
The main economic impact of Covid-19 on the UK economy
The UK declared lock down on 23 march, 2020, for controlling the Covid-19 pandemic
that helped in reining the public health crisis but taking toll on its economy (McKibbin, 2020).
The economic impact of covid-19 has largely disrupted the United Kingdom's economy. It has
adversely affected many sectors of the economy to different degrees. Sectors including
entertainment and hospitality, had been specially hit. That has led sharp rise in unemployment,
stress on supply chain, collapse in the tourism industry, decrease in government's income etc.
Due to the pandemic, service sectors was badly affected which led to a negative impact
on the economy as industries like aviation suffered huge losses(Maital, 2020). Also, because of
the coronavirus there was a fall in the import export trade. According to WTO world trade has
fallen by 12% affecting economies all over the world. That resulted in the reduction of trade
between countries, that resulted in decrease in the production activity of the economy.
Also, it impacted the public finance sector. That is the budget made by the UK
government for the housing and business activities where shifted towards the health and well
being sector (Kaye and et.al., 2020). This led to a drastic change in budgets of public finances.

And majorly, it affected the GDP of the country. Due to the virus, it led to rise in debts of the
government and led to fall in the GDP of the nation. Mainly it affected the travelling and tourism
industry of the economy. With the new policies and norms of social distancing, it reduced the
scope of the industry and resulted in major downfall of the industry. Also, the hospitality
industry was badly affected by the pandemic because of the policies of social distancing and with
lockdown and staying at home affected the industry adversely. As consumers have typically
changed their spending behaviour because of the decrease in the income and finances, as well as
the fear of pandemic that accompanied along. It led to shut down of many hotels and companies
which resulted in fall of the economy.
However, it had a positive impact on the medical and health care sectors. The impact of
the virus created a direct demand for more products leading to growth in the sector (Hevia,
2020). Also, it led to growth in the pharmaceutical industries as demand of chemicals for testing
of virus had be risen. It resulted in leaving a positive impact on the sector.
Overall the Covid-19 had a negative impact on the UK economy. It created a situation of
recession all over the world affecting every economy (Hu, 2020). It resulted in low scale ratio of
jobs which resulted in creating huge unemployment situation which resulted in depletion of the
living standards of the people and hence affecting the UK economy. Wirth the economic shock
from the Covid-19 which is highly uncertain, has led to disruption in the supply cchains. It has
also challenged the cash flows and increasing the demand for short term credit in the company,
affecting the liquidity position of the economy.
Major economic response of UK’s government and their economic implications
UK government is involved in taking concern of the impacts due to which people have
been affected and this has majorly impacted the economy due to which all the aspects of the
country have been impacted. COVID – 19 is the major downfall for UK and worldwide and this
has affected and impacted the economy at large scale. The main thing which is being concerned
about in this case is that government is taking major actions so that the impact of COVID – 19 is
less on the businesses in UK (Milne, 2020). And for this, the UK government is involved in
negotiations with the EU regarding the end of the Brexit’s transition period. The government of
UK is managing health and economic fallout from the COVID – 19 pandemic. There are various
schemes which are being applied and implemented for the good of how the pandemic problems

Business

CBE TEMPLATE
Executive Summary
The report briefly talks about effect of COVID-19 and Brexit on the economy of UK and how
the governmental measures are taken in response to COVID-19 in order to accelerate economic
growth and development. Lastly, the report also delivers certain recommendations that the
government of UK can use in order to facilitate the economic growth.

Table of Contents
Executive Summary...............................................................................................................................2
1. Introduction...................................................................................................................................4
2. Discussion and Analysis.................................................................................................................4
2.1. Impact of COVID-19 on the UK’s Economy............................................................................4
2.2. Major Economic Responses of the UK’s Government and their Implications –.....................5
2.3. Major Responses of the Bank of England and Their Implications to the UK’s Economy........7
2.4. What are the likely impacts of Brexit on the UK’s economy?................................................7
3. Conclusion.....................................................................................................................................8
4. Recommendations.........................................................................................................................8
References.............................................................................................................................................9