Evaluating the contemporary business environment

This report evaluates the impact of COVID-19 on the UK economy, major economic responses of the UK government and Bank of England, and the impacts of Brexit on the UK economy. It discusses the economic challenges faced by the UK and provides recommendations. The subject is contemporary business environment, and the course code, course name, and college/university are not mentioned.

Evaluating the
contemporary business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Explain the main economic impact of COVID-19 on the UK's economy.............................3
What are the major economic responses of UK's government and their economic implication?
................................................................................................................................................4
Analyse the major responses of the Bank of England and their implications to the UK's
economy.................................................................................................................................6
What are impacts of Brexit on UK economy ........................................................................8
Recommendations ...........................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is define about overall external factors that determined towards
business firm and having major impact on its growth. It majorly target the factors and forces like
customers, competitors, government, suppliers and others. The importance of assessing business
environment as it provides different range of opportunities that are essential for develop better
performance in business (Beynon-Davies, 2019). To make early identification gives an
opportunities towards enterprise where first opportunities instead for loosing them to competitors
In this following report, the topics is reflect on UK situation basis, as their government faces
implication through COVID-19 in economic response. Further, discuss about the major
economic challenges within United Kingdom. Illustrate about the main implication which Bank
of England faces within UK economy.
MAIN BODY
Explain the main economic impact of COVID-19 on the UK's economy.
The economic and social disruption that caused through the pandemic situation(Covid-
19), during Covid-19 it has created drastic impact on business growth at global level. As millions
of people are undertaking their life in risk to falling into extreme poverty. The impact of Covid-
19 has not only increase the poverty but also large amount loss of human lives within worldwide.
It presently challenge to public health, food system and world of work
(https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/coronavirusandtheimpacton
outputintheukeconomy/december2020).
In following there are some points that highlights about how UK face pandemic destruction in
their Economy:
 As the GDP of UK is quite stable by 1.2% during December 2020 but further it
remained 6.3% below after getting cases of Covid (Chen, Han, and Jebran, 2020).
 At the end of December 2020, services grew by 1.7% following the easing of
restrictions within many parts of the UK early in the month (Lin and et.al, 2018).
Whereas, construction business decrease their growth by 2.9% production and
manufacturing business were diminishes by 0.2% approx.
 The impact of services like hospitality industry gets high impact by Covid-19 where
Five star or domestic accommodation services are present in United Kingdom not

attain turnover. This is because government declared their Covid related restriction
policies and regulations as Lock down. Due to lock down many companies have to
faces drastic losses.
 Manufacture of automotive, transport equipment, chemicals where product and
services such as finance communication. The finance communication are the most
exposed sector in Brexit. Hospitality, tourism, transport and arts entertainment are the
most exposed economic impact of COVID-19. The automotive industry which is one
of sectors that has experienced within due to Covid-19.
 The current economic and labour market situation that hits the United Kingdom
specially hard in comparison towards international counterparts. It is most recent
monthly GDP figures which showed the United Kingdom bounce back (Smajlović,
Umihanic and Turulja, 2019). It was continuing to slow even before further lock
down restrictions were announced.
 In Finance well-being which unprecedented through government support, financial
well being was drastically. Many employees losses their jobs and faces high rate of
unemployment.
 The situation of Communities and Central belonging where theme across about the
evidence rasise the important role towards community led responses. It is depend upon
the local knowledge and resources which better build capacity and also channelise
about interconnectedness between government community organisation in public. The
evidence is clearly shows that those communities that entered in pandemic situation
are best place to response.
 Through Covid-19 it has significant and unequal affects which depending on where
UK people live their livelihoods of education, socio-economic and better health status.
What are the major economic responses of UK's government and their economic implication?
As the Covid-19 is creates global destruction in global level, but in UK it creates serious
implications for people's health and other healthcare services. In this Covid would creates
important impact on business and economy (Haji, 2021). The implication makes more drastic
situation where UK economic system experience financially and mentally. Many people are not
capable to keep up their livelihood and due to that government approval their activity to direct
and stabilised condition as per the guidelines which they form. As UK government seek many

solutions and Lock down is one of main practise that they implements to secure people lives.
Strict rules and regulation were introduced where people togetherness prohibited, wearing of
mask and vaccination. When United kingdom declared the Lock down on March 23,2020 to
control Covid-19. It seems that United kingdom is very supportive and provide proper health
issues which enroll better economy. Due to typically lock down, there was a rapid fall down in
employment as many lays offs, temporary furloughs and reduction of the wages as per hour day.
At nearly 50% of all the jobs are at risk are occupation earning less than around 10 Pounds per
hour. This Covid -19 creates consequence set out about how government will continue to protect
and support citizens across within the United Kingdom where the lock down in
England(Beynon-Davies, 2019).The government of United Kingdom successfully accomplished
in their goals to offer first dose of vaccine in around mid week of February by Joint Committee
Vaccination and Immunisation (Kang and et.al, 2021). It includes elderly care within clinically
extremely vulnerable towards serious illness and death as the consequences of Covid-19. The
government aims of everyone who is 50 and over or at risk to have been offered a first dose
through vaccine by around Mid week of April-May month. As UK government make proper slot
on the basis of age factor like peoples who are 18 and over to have offered first dose of
vaccination.
The economy of British is one of the sixth largest economy around the world but due to
COVID-19 pandemic it got slowed down. The government economic response to coronavirus
has limited the damaging effects of virus and the restrictions associated with it. In context with
this, jobs were being protected through two schemes which are self-employment income support
and job retention scheme. On the basis of this, the government of United Kingdom helped people
who were looking for the work (Haji, 2021). In terms of the immediate challenges of overall
pandemic, the government will help all small businesses in order to enhance their productivity
level and supporting them to make certain improvements and adopt new technologies. During the
first lock-down, the GDP of United Kingdom was 25% lower in the month of April in
comparison to two months earlier. In accordance with this, the government and all central banks
established policies in order to support both business and workers.
In terms of socio-economic frame, the UK government provided fiscal support to all
households and safeguard companies with the help of job retention scheme (hamed, S.T.,
2021).During the situation of pandemic, the government was not being much active as which

action plan they should implement and in terms of economic response, government implemented
herd immunity approach. It states that people would be allowed to go out of their homes only if
there is any kind of emergency which created a negative effect on economic response. So, by
analysing it the government response to economic implications, they committed to efficient
amount of support to allow all the businesses to stay at top business rates. The government also
provided extra amount of funding in context with all kind of public services. Apart from this,
they offered around £330 billion of guaranteed loans to business sectors. In terms of the
economic implications during pandemic, the response of government has come at a large amount
of financial cost which is indulged with certain actions and services like in the form of health
facilities and also the practices being opened (Kang, and et.al, 2021).
The government gave response in context with different economic policies like financial
support to health sector, social protection, preventing discrimination and many more. COVID-19
pandemic have been one of the worse health emergencies which created huge impact on the
economy of the country (Troske, 2020). With respect to this, it became important for the
government to respond in the form of financial support or any other measure which could
support large parts of the economy and manage financial stability, economic welfare and help all
individuals to survive during the crises. They initiated the biggest vaccination program through
which around 18 million people have received vaccine.
Analyse the major responses of the Bank of England and their implications to the UK's economy
The bank of England main function to maintain the monetary stability and to supervise its
financial stability of the UK financial system. The bank of UK sometimes also act as investor of
resorts and as protector of the official reserves of gold and metals within UK . In addition, the
Bank of England and its regulation Authority have been announced a supervisory and policies to
design and help UK business and household of business (singh, Verma and Verma, 2020).
However, bank of England is a bridge in between the economic interruption that is linked to be
interconnected with the situation of COVID-19. This regulatory actions are designed to maintain
its financial stability that make sure the safety and protection of firms and make sure its policy
holders that are protected (Lin, and et.al, 2018). The impact of UK bank of England and how the
financial conduct authority has responded in response of covid-19 is as follows;
 Treating customers fairly- The UK banks announcing its first set of special measures that
is stressed banks must be treat its customer in a fair manner. This is one of core principles

of banking to treat its customers fairly. Because banks know that they are in a position to
do these things in relation to influence their customers. Therefore, Bank of England will
be watching these things in a careful way(Smajlović, Umihanic, and Turulja, 2019).
 Financial system resilience- According to financial policy record, the Bank is focused as
expected on the financial stability that is risking and facing the market as a result of
disruption in economy that is caused due COVID-19. In addition the bank of UK has also
released a joint assessment making sure the Public that are in strong position. The bank
also provides various supports and highlight the range of protocols for households and its
business. This will provides the various scope to its financial system during their
extraordinary times. In addition banking system has been capable to absorb a very sharp
financial market stock and its considerable resilience that is remain in banking (Troske,
K., 2020).
 Insurance Industry- The bank of UK noted that Covid-19 pandemic has given a rise to its
additional difficulties by estimating the ultimate losses and its issues that is concerning
the four key areas. That is data, discontinuities and its historical trends. These are the
major thing that include the emphasis placed on its cyber resilience as this provides result
of changes in its pattern of work and will helpful to increase reliability within technology
(Singh, Verma and Verma,2020).
 The climate change- The house of common environmental audits presented the several
evidence which stressed the short of window opportunities that keep remaining to keep
the global temperature that us rises on the managerial level. The banks are growing its
consciousness that they should take risk of Covid-19 situations in its operations.
Moreover, bank of UK responses the crisis of Covid -19 that is attracted to renewed its
policies that should need to collaborated to assist and support the goals of climate
(Trojanowski, 2020).
 Reduction in bank rate and new term of funding scheme- there are various measures have
been taken by bank of UK. This is mainly have intention to support the confidence of
customers and will increase the liquidity within marketplace and incentivise the banks to
building its societies to support small medium enterprises that mainly bear the brunt of
market contractions.

 Covid corporate financial facilities- This is mainly used to provide additional help to
fund to the organisation which is not capable enough and also the organisation which
facing a disruption to its cash flow (Shams,and et.,al2021)
As from the above assessment there are several responses of bank of England to recover from the
situations of covid -19. They have made several policies for business and peoples to keep carry
their business. The bank of England tries to raise funds for small medium enterprises. This can
directly affects the economy of country and provides employment to the people who do not have
any work to do. Also, banks of UK raised its funds for doing and promoting the household
activities to promote the economic sustainability to its country and make people feel comfortable
and confident to fight covid-19 pandemic (Nwankwo and Richards, 2020).
What are impacts of Brexit on UK economy
According to the study impacts of Brexit On UK economy. This will impact on the
disruption of flow of goods and services from the UK and was long participated and
consequence on Brexit. Many of the business will react by reposting of goods. While there are
also free Tariff trade in between the UK was still within place. Moreover, in July the office
monetary system fund province said that a no deal within Brexit that could lead to house prices
dropping by near around 10 percent by mid 2021. Also, due to Brexit prices of KPMG product is
increasing, the House prices will rise by 1.3 percent in 2020. The KPMG products figuring that
prices will in between 5.4 percent and 7.5 percent and does not able to modify the prices will
crash after Brexit by 20 percent (.Fernando, Jain and Tripathy, 2021).
Apart from this Brexit can harm fully impact on the growth of UK. Because of uncertainness
found within a surrounding and can not capable to provide its last outcome within organisation.
The Brexit also impacts the young worker of UK. The UK is proposed to have insufficiency of
Labour. Due to this is awaited by research worker those Jobs would not available to the worker
of UK. In addition, the employers are having the difficult time to discovery the applicants
(França, and et.,al2020). This Brexit impacts on low skilled and medium skilled occupations on
most. However, The fiscal landscape also have deteriorated markedly and suggesting the less
policy and its flexibility to eliminate the economic shock of failed UK and its trade negotiation.
There are also specific risk of Brexit risk that is associated with the Trade talks of UK. The UK
also failed within Trade Talks by reverting to the world trade organisation in terms of its product
and services within organisation. Also, the Fiscal landscape has also deteriorated this will

suggesting the policy as well as flexibility to eliminate the economic shock . The poorer labour
market conditions have make sure that namely falling within numbers of workers on the payroll
of people working within fewer hours as well as learning less and rising the benefits of
employment within country UK. (Larson, 2020).
Recommendations
The recommendations for the impact of Covid -19 on central banks is as follows;
 The central bank are focusing on package of several measures that will help and keep the
firms in business and people in Jobs. Also, the central bank are trying to focus to helps
and minimise the damage of long term activities to prevent damage to the economy from
long term damage.
 The central bank are also working closely with government so they can co-ordinate what
do and make sure they have maximum impact within economy.
 The central banks also helping the business to pay its staff and suppliers, This will assist
them keep paying the wages and their suppliers if they have some serious problems
related to cash flow.
 The central bank of UK also provides fund for building the societies. This can be helpful
for small medium enterprise and helps to keep support unemployed person of UK.
 The central bank of UK are helping bank to expand lending. The bank have reduced the
amount of financial risk as well as resources that banks are building its societies that
needs to set against its lending to UK business and its households. The UK central bank
are agreed to the dividends to its shareholders for their assistance within business.
CONCLUSION
From the above report, it has been analysed that business environment is determine about whole
external factors that observed towards business firm and having better impact on its growth. It
majorly target the section and forces like customers, competition, governance, provider and
other. Also, this report consists of what are the affects and responses of central bank and how
this can impact on the growth of UK economy . The central bank how they can make the policies
that help the small medium enterprises and also the peoples who are unemployed and do not
have any work to do. Also, the central bank also assist the UK economy in up gradation of their
households activities to boost up the Countries economy.

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response-spring-2021).

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