Impact of Monetary and Fiscal Policies on Business Activities in the UK

Business Environment

INTRODUCTION
 Business Environment is defined as the factors including internal and external, which affects the business.
 Both factors influence each other that affect the organisation and these external and internal factors work
together to accomplish the business objective.
 For example external factors like political condition, economic condition of the country and internal factors
like organisational culture both affect the company.
 Tesco is the leading brand name in the UK in the retail and supermarket industry which grows faster, it
operates largest range of groceries stores and supermarket in UK.
 Organisation suffers from the fiscal and monetary policies which affects its development in UK and in
Global market. Further it discusses the regional and global developments reflect the business activities.

Impact of the monetary and fiscal policies on the business
activities in UK.
 UK has the largest economy in the world which is on sixth place globally. It exhibits
wide range of trading all around the world.
 As it possess the strong economy just because of its good policies in terms of the
monetary and fiscal terms.
 UK has the stability in their government after Brexit as the EU has suffered a lot.
Discusses on the impact of such governmental policies.
 These policies helps to regulate the country’s economy and it easier the survival of
the people.
 People improves their living standard, their businesses and thinks innovatively.

Cont..
Monetary Policy
 These policies conclude the interest charges and cash flow in the country, its uses and their supply of
money which helps the country to achieve their objective in economy senses.
 This monetary policy is handled by the Bank of England which circulates the money and make decision
on the interest charges since 1997.
 Objective of this monetary policy in UK is to keep the inflation stable and lower. In this way the Bank
try to keep the economy growth stable.
 If there is stability in the economic condition of the country, it supports the country to target for large
economy.
 2% inflation is targeted by the government. Setting the interest rates, it is about the rising in the
inflation rate if the inflation rate is higher than the interest rates also higher.

Cont..
Fiscal Policy
 Fiscal Policy is about the changing tax amount and government spending
which directly influence the level of economic activities of the country.
 Fiscal policy affect the levels of the government borrowings.
 It is not frequently used while government uses it to moderate the economic
condition.
 There are lots of political difficulties to change the rates of the tax, it just
reduce the inflation pressures.
 The government have to leave the economic management to monetary policy
and the Bank of England.

Objectives of Monetary and Fiscal Policies
 Low inflation
 Strong economy
 Lower the unemployment
 Maintain sustainable public finance.