Impact of COVID-19 and Brexit on UK's Economy

Contemporary business
environment

Table of Contents
INTRODUCTION ............................................................................................................................3
Major impact of COVID 19 on the economy of UK.....................................................................3
Major economic responses by the UK's government and their effects on circular flow of income
in UK.............................................................................................................................................4
Responses of the England Banks and their implication ...............................................................6
How Brexit affect the UK's economy............................................................................................8
CONCLUSION .................................................................................................................................9
REFERENCES.................................................................................................................................11

INTRODUCTION
The term business environment is embrace all those components that has ability to affect
operational activities of a business. It is the collection of all events, conditions and influences that
surround and impact an organisation. The economy of all nations get impacted adversely due to
the COVID 19. It influence the national economy in a negative manner. Due to this, many people
lost their jobs and many companies had to shut their business. Almost people came under the
poverty line and become dependent on the government services. The COVID 19 also affect
individual's lives. This pandemic situation had effect the business adversely internally or
externally (Bagchi and et. al., 2020). This report will cover the effect of COVID 19 on UK's
economy, measures taken by the government to maintain business, major response of England
Banks with its implication on circular flow of income in UK and impact of Brexit in the economy
of UK.
TASK
Major impact of COVID 19 on the economy of UK.
After arising of the pandemic situation, the economic condition of every nation has been
impacted in different ways like due to the lock down, there is shutting down of business along
with less practise of export and import activities. It result in the declining of Gross Domestic
Product in country and also effect individual's lives in a negative way. The causes of shutting
down business is low level of demand of products and other services at the marketplace. It is
examined that during this time period, people became more about their health and the hygiene
and this result in declining company's sales. The COVID 19 mainly affect the hospitality,
travelling and tourism, industries (Balasubramaniam and et. al., 2020).
It is also observed that, the pandemic situation also impact profit margin of different industries as
the demand of goods and services decrease in market with more restriction on imports and export.
It is predicted by the budget responsibility office that it cause around 35% fall in GDP, but the
research and economy's national institute has made it clear that the GDP of nation has decreased
around 15 to 25%.
In country's economy, the employment rates also declined in business industries as well as nation
because of the COVID 19. It is also determined that mostly employees in organisation had lost

their jobs and become unemployed. The demand and trade flow of different product and services
except essential goods has also declined. The government made a large investment to made
separate COVID zones and availability of vaccines for citizens. It lead a decrement in economic
rate of country. In April 2020, the nation government borrowed around £299 billion money for the
protection of country's citizens. This amount of money is considered as a highest debt that was
borrowed by nation. As per an analysis of the national statistics, it is determined that the
economy's debts has increased with a percentage of 100.5% that impact the economic situation
and cost of nation ( Brownlow and Budd, 2019).oyment as due to the lock down in country,they
lost their occupation. In the expert's survey it has been analysed that approximately 22%
population of country has been suffering adversely due to the situation of pandemic and around
73% of the people were engaged in food industry and the construction business were also
impacted severely because of COVID 19.
Additionally, the companies with education sectors also got impacted by the COVID 19. there was
a temporarily shout down in the education institution or sectors. Due to this, there was no classes
for primary students. The transportation sectors has also stopped due to the pandemic or lock
down situation, it lead to a decline in oil prices in economy. The British petroleum estimated a
decline in rate of petroleum around 0.5%, but, there was approximately 17% downfall is
measured in the price of petrol ( Fernandez-Pacheco Theurer and et. al., 2018). Therefore, almost
all industries such as hospitality, transportation, education, agriculture and many other has been
impacted in the pandemic situation of COVID 19.
Major economic responses by the UK's government and their effects on circular flow of income in
UK.
The COVID 19 has made a great impact on the individual's lives. In first wave of COVID
19, it has been seen that, positive cases of coronavirus increased in very immense manner. In this
situation, to minimize number of these cases the government authorities of UK has imposed some
restriction on entertainment industry, social gathering, hospitality, travelling and tour industry.
Due to this, there was close to 9.8% downfall is determined in the economy of UK. The
government of country undertake different kinds of measures and policies in order to arrange food
and funds for the individual of society. There are different actions taken by UK's government to
support economy and families during the pandemic situation which are mentioned below: