Management Economics: Inflation, Bank of England's Role and Yummy Bites Group

MANAGEMENT
ECONOMICS

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Explanation of inflation, it causes, implications and effects..................................................3
Appraise the possible effects taken by the Bank of England and including government role
and tools in inflation control ..................................................................................................6
Discuss the effects of interest rate increased to Yummy Bites Group...................................7
Conclude and produce recommendations...............................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Management economics is a assistance tool of economics which is provided the methods
and techniques to take decision for distribution of resources. It is the study of distribution,
production and consumption of goods and services. It improves the efficiency and effectiveness
of unproductive activities. It also includes the decision making process of the future regarding
risky and uncertainty (Boda, 2018). In this report discuss about the increased inflation rate of
energy soars and increased the interest rate of Bank of England which has impact of Yummy
Bites Group situated in UK. Further in this report considering the government's role and tools in
inflation control.
TASK
Explanation of inflation, it causes, implications and effects
Inflation is always harmful for an economy because it can affect the economy in different
ways. The high inflation rate affect the savers because it destroy the purchasing power of the
fund. It can provides the benefits of insurer because it reduces the outstanding interest due to
adjusted inflation rate. In simply words inflation means rising the prices of goods and services.
The inflation can affect product or services which includes necessary items such as housing,
medical care, food and cosmetic items. It saves the money in present rather than in future. For an
example if investors earn money 5% from shares and bonds, but the inflation rate is 2% , the
investors actually earned income only 2%in real time. There are many factors which can affect
the inflation and prices in an economy. The production costs and demand for product and
services increased due to inflation results. There are three important concepts which are explain
the inflation (Damania, 2020).
 Money given to citizen for printing.
 Reduces the value of legal tender currency.
 To purchasing brand from secondary market and loaning new fund through the banking
system.