Business Economics Report: UK Unemployment and Business Success

This report examines the economic impact of unemployment in the United Kingdom, focusing on its effects on businesses. It begins with a general background on the UK's economic landscape and the current unemployment situation, exacerbated by the COVID-19 pandemic. The report then applies an economic framework, specifically classical unemployment theory, to analyze the causes and consequences of joblessness, including the decline in company profits and sales. Furthermore, the report critically assesses the role of the government in mitigating unemployment's adverse effects and fostering business success, highlighting measures such as wage subsidies, financial support, and the development of appropriate guidelines and policies. The analysis includes relevant data and visual aids to support the findings and concludes with a summary of the key insights and recommendations.

Business economic
UK

Contents
INTRODUCTION .....................................................................................................................................3
MAIN BODY ...........................................................................................................................................3
a) A general background of your chosen country and topic..............................................................3
b) An economic framework or methodology to explain your chosen topic and provide a critical
analysis on how that topic affects or could affect the success of businesses in the country. ...........5
c) What role could the government play in advancing business success in the country amidst the
chosen topic?.....................................................................................................................................7
CONCLUSION ........................................................................................................................................8
REFERENCES..........................................................................................................................................9

INTRODUCTION
A company or business unit get impacted by the economy of nation because
accordingly there as well as customer’s buying power get change. So it is essential for
companies to understand the economy of nation before launching any products or services in
specific market as that will help in developing decision and plan (Dong and et. al., 2020). In
order to determine the economy of nation a company need to understand both microeconomic
as well as macroeconomic in nature. It is so because both have different facts which help in
understanding market economy more effectively. The nation which is selected for respective
report is United Kingdom which is located at the north western coast of the European
mainland. Respective nation is considered as developed nation which economy is strong as
compare to others. Topics covered in respective report are United Kingdom background and
topics i.e. unemployment part of macroeconomic. Moreover it also include economic
framework or methodology for explaining selected topic as well as it describe about roles of
government play in advancing business success in nation.
MAIN BODY
a) A general background of your chosen country and topic
United Kingdom is also known as Britain, it is a nation that is located off north
western cost of European mainland. The respective nation includes several locations like
island of Great Britain, north eastern part of island of Ireland as well as many other small
islands. United Kingdom is generally surrounded by the Atlantic Ocean with North Sea to
east, English Channel to south as well as Celtic sea to South west, this prove it the 12th
longest coastline in the world. The total area in which United Kingdom is located is around
94000 square miles that is equal to 240000 Km2. The economic condition of United Kingdom
is highly developed as it is social market as well as market orientated economy. It is
considered as fifth largest national economy around the world on the basis of measurement of
nominal gross domestic product (GDP). In addition to this, respective nation is considered at
the ninth largest nation on the level of purchasing power parity as well as twenty first largest
through the GDP per capita (Einiö and Overman, 2020). The United Kingdom currency is
pound sterling that is world’s fourth largest reserve currency after dollar United State, Euro
as well as Japanese Yen currencies around the world. The United Kingdom, GDP is enhanced
by 1.4 percent in 2019 which is contrasted with the 1.3 percent in 2018 (IMF). According to
the refreshed or new IMF data from the 14th April 2020. It is generally happen because of

pandemic situation of COVID 19, development of GDP is required to tumble to 6.5 percent
in 2020 as well as get to 4 percent in year 2021. in respect of post pandemic situation
worldwide monetary recuperation, decision related to expansive international alliance (FTA)
with the European Union. Along with this, it is related with the smooth post Brexit change
duration. The country's economy get impacted through the vulnerabilities that is
encompassing the continuous exchange activities around the Brexit as well as through the
normal expansion further include exchange cost. Effective or potential development boost to
the eased back as of the moderate amassing of the capital, decline in the net relocation from
EU (European Union) as well as constantly less effective . It is indicted through the IMF,
reverting to WTO rules related to exchange, even in the arranged way, this will leads to long
haul development misfortunes for the United Kingdom. This is round the 5 percent to the 8
percent of gross domestic product contrasted along with a situation with out the Brexit.
In addition to in current year i.e. 2020 United Kingdom experienced huge decline in the
economy which leads to decrease in company profits due to which they fire employees (The
economic context of the United Kingdom, 2020). This will leads to increase in the rate of
unemployment at the United Kingdom. Below given graph show that how unemployment
rate of United Kingdom in year 2020. This is mainly happen due to decline in the economic
condition of nation for the reason of COVID 19 pandemic.

Figure 1 Monthly Unemployment rate of UK
(Source - Monthly unemployment rate in the United Kingdom from January 2010 to August
2020. 2020)
b) An economic framework or methodology to explain your chosen topic and
provide a critical analysis on how that topic affects or could affect the success
of businesses in the country.
Unemployment is considered as term which refers to individual who are employable
as well as looking a job but they are unable to find it. In other word it is determined as
individual or pool of people who are willing to work but didn’t have appropriate job. This
will decrease their standard of leaving as they didn’t have any source of income. Around the
world unemployment situation encourage or push people take wrong steps such as crime or
theft. Unemployment is of four type’s i.e. frictional unemployment, cyclical unemployment,
institutional unemployment as well as structural unemployment (Jeris and Nath, 2020). In
current year i.e. 2020 where every nation is facing pandemic situation of COVID 19 there is
enhancement in the rate of unemployment as business not able to earn profit so they are doing
layoff of employees. This increase unemployment rate at the national as well as international
level. In respect of United Kingdom unemployment rate in three months to the September
2020 is determined at 4.8 percent which is 0.9 percent more than a year earlier as well as 0.7
percent higher than the last quarter. There are several types of and theories of unemployment

such as frictional unemployment, cyclical or Keynesian unemployment, structural
unemployment as well as classical unemployment. From all one of the mostly used economic
framework for unemployment is classical unemployment, which include situation when there
is real wages for job are fix above to the market clearing level. That mainly leads to
opportunity for number of job seekers to exceed the numerous of vacancies. Through
adopting respective theory United Kingdom may balance or manage the impact of
unemployment level on the business or industries.
Figure 2United Kingdom unemployment rate
(Source - JOB LOSSES Coronavirus pandemic sparks biggest surge in unemployment in a
DECADE. 2020)
From above graph it can be determined that due to pandemic of COVID 19 there is
enhancement in the rate of unemployment as during this business are not able to operate
properly due to which they need to fire their employees. This will impact on the nation,
business as well as people as economic condition of all get fall. The pace of joblessness rose
to 4.5 percent — from 4.1 percent in the past a quarter of a year, The Office for National
Statistics uncovered. The quantity of labourers who have lost positions since March hit
673,000, yet opportunities are up in September (Sensier and Devine, 2020). The quantity of
redundancies additionally kept on expanding over the period, up by 113,000 in June to
August contrasted with a similar time a year ago, and up by a record 114,000 on the quarter,
to 227,000. This is the biggest yearly increment since April to June 2009, with the quantity of
redundancies arriving at its most significant level since May to July 2009. It comes as the
public authority's leave conspire ensuring occupations and wages is because of reached a

conclusion this month, with numerous supervisors making labourers repetitive in expectation.
In addition to this unemployment impact on the business as when there is unemployment then
an individual have less income which leads to situation where people purchase only essential
products and service. So this will directly impact of the sales of business as that leads to
decrease in profitability ratio as well as market shares.
c) What role could the government play in advancing business success in the country
amidst the chosen topic?
Around the world government are taking steps in order to fight with the
unemployment at the nation so that business can run effectively and successfully. In addition
to this government are taking steps for the succession of business which get impacted due to
COVID 19 pandemic. The public authority or government is to pay the wages of millions of
labourers across Britain to keep them in positions as the financial aftermath from the COVID
episode raises. In an exceptional advance for the British government, the chancellor, Rishi
Sunak, said the state would pay awards concealing to 80% of the compensation of labourers
if organizations kept them on their finance, as opposed to lay them off as the economy
crashes (UK government to pay 80% of wages for those not working in coronavirus crisis.
2020). The remarkable instalments will be worth up to a limit of £2,500 every month, simply
over the middle pay.
Along with this government are also helping business so that they get successes during the
COVID 19 pandemic and unemployment situation which arise due to it. In respect of this
government of United Kingdom is providing financial support to those business who needed
it so that they can work properly as well as try to generate employment. In addition to this,
government of respective nation also providing loan options to the companies or business so
that they can operate effectively as well as successfully in the potential market (Zhu, Gao and
Sherman, 2020). Along with this, government also develop proper guidelines, rules,
regulations and policies which help a company in operating accordingly during the pandemic
of COVID 19. This will help several business to come back in action after the huge lockdown
as well as this will also help in minimising the unemployment rate as compare to the starting
ratio of respective year. Moreover, government also providing some amount of funds to those
employees who lose their job during pandemic situation. This step of United Kingdom
government help business in minimising their burden related to economic growth.

CONCLUSION
By conducting evaluation of above mentioned topics it can be summarised that
economy condition of a country impacted highly on the company performance or business. It
is so because all the factors of macroeconomic as well as microeconomic environment are
related with the business operations and functions. So it is essential for company to
understand nature of macro as well as micro economy environment and then develop
strategies or plans accordingly. In respect of macroeconomic factor unemployment is one of
the main issues experienced by a nation. This will impact on the business as their employees
feel demotivated which decrease their work quality as well as it also leads to decrease in
market shares or goodwill. In this respect government also plays role so that they can
minimise the case of unemployment such as they provide jobs, develop rules and regulations
and many more.

REFERENCES
Books and Journals
Dong, S. and et. al., 2020. Improving the feasibility of household and community energy
storage: A techno-enviro-economic study for the UK. Renewable and Sustainable
Energy Reviews, 131, p.110009.
Einiö, E. and Overman, H.G., 2020. The effects of supporting local business: Evidence from
the UK. Regional Science and Urban Economics, p.103500.
Jeris, S.S. and Nath, R.D., 2020. Covid-19, oil price and UK economic policy uncertainty:
evidence from the ARDL approach. Quantitative Finance and Economics, 4(3),
pp.503-514.
Sensier, M. and Devine, F., 2020. Understanding regional economic performance and
resilience in the uk: trends since the global financial crisis. National Institute
Economic Review, 253, pp.R18-R28.
Zhu, S., Gao, J. and Sherman, M., 2020. The role of future economic conditions in the cross-
section of stock returns: Evidence from the US and UK. Research in International
Business and Finance, 52, p.101193.
Online
The economic context of the United Kingdom. 2020. [Online]. Available through:<
https://www.nordeatrade.com/en/explore-new-market/united-kingdom/economical-
context#:~:text=Sixth%20largest%20economy%20in%20the,%25%20in
%202018%20(IMF).>.
Monthly unemployment rate in the United Kingdom from January 2010 to August 2020.
2020. [Online]. Available through:<
https://www.statista.com/statistics/279990/monthly-unemployment-rate-in-the-
united-kingdom-uk/>.
JOB LOSSES Coronavirus pandemic sparks biggest surge in unemployment in a DECADE.
2020. [Online]. Available through:<
https://www.thesun.co.uk/money/12914831/unemployment-workers-vacancies-
increases-september/>.
UK government to pay 80% of wages for those not working in coronavirus crisis. 2020.
[Online]. Available through:<
https://www.theguardian.com/uk-news/2020/mar/20/government-pay-wages-jobs-
coronavirus-rishi-sunak>.