Impact of Inflation and Unemployment on the UK Economy

This report examines the economic challenges of inflation and unemployment in the United Kingdom, highlighting the impact of Brexit and the COVID-19 pandemic. It details how rising inflation decreases consumer purchasing power, affecting businesses and employment rates. The report analyzes the government's responses and policies, emphasizing the need for strategies to boost employment and control inflation. It concludes that the UK faces significant economic hurdles, particularly due to the combined effects of the pandemic and Brexit, necessitating policy adjustments to stabilize the economy and improve the lives of citizens. The report references several academic sources to support its findings, providing a comprehensive overview of the UK's economic situation.

Business Economics

TABLE OF CONTENTS
Executive Summary.........................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Inflation and Unemployment in UK............................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

Executive Summary
Inflation and unemployment rate continuously rising in United Kingdom which effected
number of life and increase poverty as well as hunger around the country. There are number of
political and economical challenges that occurs because of pandemic and it impacts on growth of
various industry. Coronavirus has major effect on British economy and GDP of country become
negative which increase tension among government as well as individual.
INTRODUCTION
Brexit and COVID has high effected economy of British. It can be observed that large
number of people facing challenges livelihood. Most of the business in country about to collapse
which increase tension among citizens as well as government. Large number of policies as well
as economic packages are not able to overcome from it. Economist predicts that worst has yet to
come and it will be the first time that country will face the greatest recession country ever had.
Britain's exist from European union is another reason for the country's negative growth. Prices of
commodities continuously surging which decrease purchasing capacity of customer to purchase
it. Closing down of tourism sector after pandemic again hampered growth of country and it
might create challenges for long terms. Before COVID, it was assumed that large number of
people employed because of entrepreneur opening but in practical most of are shut down because
of lack of consumers. European raw material cost rises because of tariff as well as custom duties
which again rising inflation rate and can impact growth of country's Gross domestic product
(Simionescu, Streimikiene and Strielkowski, 2020). Government action related to monitor and
control these challenges are ineffective which increases protest by large number of citizens in
country. They are not able to frame policies as well as procedure which can help in decrease
economic issue in country.
MAIN BODY
Inflation and Unemployment in UK
Inflation: -
Inflation is the economic term which is used in the economic language to represent the pricing of
the good and the inflation of economy in the country. It refer to the process of the economy
which explain the detailed of the economic situation of the country and it also explain the
economic stability of the country. When the prices of the goods and services rise, the purchasing
power of the consumer decrease. The measurement of the inflation is refer as the inflation rate

or the rate of inflation. Inflation is affecting the UK economy as everything is increasing in the
cost of goods and services and the economy is affected due to the inflation rate of the country
(Forbes, Kirkham and Theodoridis, 2017).
Employment and unemployment: -
Employment refer to the agreement between the individual and the different identity which
stipulates the responsibility, and the payment agreement with terms, rules of the different
workplaces and are recognized by the government of the UK. It is an idea of the verbal and
written agreement with the separate entity to be known as employee. Employment is important
for the country so that they can control the economy situation and also the economic stability
through better employment (Argy and Nevile, 2016).
Unemployment refer to the person and the people who are searching for the employment in the
country so that they can run there family and can earn money for there life. The unemployment
rate is so high in UK which is causing their economy in a long run for which they need to work
on it.
Effect of unemployment and Inflation in UK: -
Unemployment is one of the major challenge which the UK government is facing and it is
affecting the overall business and economy of the country. It is very crucial for the organization
and the country to make different strategies and planning so that they can generate the
employment in the country and reduce the unemployment rate of the UK. UK is known as one of
the most powerful countries in the world but due to different reason the country is facing the
unemployment and the economy of the UK is decreasing badly. The inflation rate of the country
is rising and the rates of the country are increasing due to inflation in the market and lack of
employment are affecting people to survive in UK. It is crucial for the government to make
different plans so that they can make better utilisation of the resources the UK is having in there
working places. UK is known as one of the places where all the brands and company wants to
make there head offices, the inflation rates and the unemployment f the UK is affecting the
overall economy of the country and is affecting the people of the UK into worst situation as they
are facing a lot of health and other issues due to lack of nutritions and other specified reasons.
The economy of the united kingdom is decreasing and the inflation is increasing and now the
country is facing the worst of the covid-19 which is increasing the effect in the British country
and people are facing a lot of issues and they does not have money to even take care of

themselves. The government is facing a lot of issues in making the covid-19 situation to get
controlled but in recent times UK is the only place which is been affected due to the covid-19 in
the worst and the economy collapse of the UK (O'Connell, 2016).
The unemployment are causing the people not able to survive in UK and the rates of the inflation
in the country is affecting the working and the economy to go down. The people of the UK is
facing the worst situation in the recent time due to covid-19 and is still not recovered from the
situations. Unemployment rate of the UK is risen in recent time and people are not able to find
the proper jobs and not even the part time jobs as the country was having a lock down situation
in the UK due to covid-19 outbreak into multiples of number cases in UK. The effect of covid-19
and the rates of the inflation prices in UK is making life bit tough for the people of UK. It is
important for the government of the UK to make new strategies and increase the opportunities of
the employment for the people who are living in UK. It is crucial for the people to get a good job
so that they can face the inflation issues and can survive in the inflation time period in the
country.
The government need to increase different ways to control the unemployment into the country
and they also need to control the inflation rates of the country so that people can survive in the
covid-19 pandemic. Providing new opportunities from work from home and other ways to
increase the employment in the country so that people can survive the issues the are facing and
the government need to control the overall economic through different measures so that the
economic situation of the country rise. It is important to work on all the issues which are
choosing the government in economic losses need to be recovered so that they can work in better
environment and also need to work in such a working economy so the people and the country
can make changes according to the situation and can face all the issues they are facing (Hoand
Iyke, 2019).
UK is working in increasing the employment through increasing the MNC in the country so that
they can increase the employment and cure the economy so that people of the country can work
in the best ways to develop the things.
CONCLUSION
It can be analysed from the report that BREXIT and COVID has highly effected country's
growth and increase inflation as well as unemployment rate in country. Pandemic Lock down
again shutdown number of MNCs as well as small companies (Rodríguez-Caballero. and Vera-

Valdés, 2020.). Majority of employment in United Kingdom comes from SMEs which are not
able to gain customer and hence profit continuously rising which effected on growth of country
and large people lost their job. Tourism is another industry which offers employment to large
number of people in the country but because of pandemic it faces number of challenges in
running business. BREXIT has increase tension between suppliers as well as purchaser from
both sides for exchanging raw material and services. Government tries to support growth of
country by providing some amount of fund in unemployment's account which help in
maintaining purchasing power but still there are number of changes needed in policies and
framework to increase employment rate and decrease inflation rate in country. People in the
country focusing on saving funds which again not maintaining financial growth of country. It is
important that expenditure of people increase which again increase flow of economy and
decrease inflation as well as inflation rate.

REFERENCES
Books and Journals
Argy, V.E. and Nevile, J. eds., 2016. Inflation and Unemployment: Theory, Experience and
Policy Making. Routledge.
Forbes, K., Kirkham, L. and Theodoridis, K., 2017. A trendy approach to UK inflation
dynamics. The Manchester School.
Ho, S.Y. and Iyke, B.N., 2019. Unemployment and Inflation: Evidence of a Nonlinear Phillips
Curve in the Eurozone. The Journal of Developing Areas, 53(4).
O'Connell, J., 2016. On Keynes on inflation and unemployment. The European Journal of the
History of Economic Thought, 23(1), pp.82-101.
Rodríguez-Caballero, C.V. and Vera-Valdés, J.E., 2020. Long-lasting economic effects of
pandemics: Evidence on growth and unemployment. Econometrics.8.(3).p.37.
Simionescu, M., Streimikiene, D. and Strielkowski, W., 2020. What Does Google Trends Tell Us
about the Impact of Brexit on the Unemployment Rate in the UK?. Sustainability.12.
(3).p.1011.