The Role and Impact of UK Fiscal and Monetary Policies on Business

This presentation examines the fiscal and monetary policies of the UK, detailing their roles and impact on the nation's economy and business environment. It defines fiscal policy as the government's control of tax rates and spending, and monetary policy as the central bank's management of liquidity and interest rates. The presentation covers the different types of fiscal policies, including expansionary and deflationary measures, and their effects on aggregate demand, private sector development, and social infrastructure. It analyzes how these policies influence organizations, using Vodafone as a case study to illustrate the effects on business growth, employment, and competition. The conclusion emphasizes the importance of these policies for economic development and their wide-ranging impact on businesses and public spending, supported by references to relevant literature.

INTRODUCTION TO
BUSINESS
ENVIRONMENT

INTRODUCTION
• This presentation is going to highlight the main role of
fiscal and monetary policy of UK as well as its impact on
economy.
• Business environment includes all internal and external
information which affect activities of a company like
economical policies.

Role of Fiscal Policy
• Fiscal policy refers as a means by which regulatory bodies of a
nation regulates and adjust tax rates, spending levels and
more.
• The main purpose behind such adjustment is to monitor and
manage country's economy.

Types of fiscal policy
Expansionary fiscal policy: This policy is widely-used as it stimulates aggregate
demand and boost economic growth rate of nation.
Deflationary fiscal policy: In contrast with expansionary, this policy is used to
decrease aggregate demand and inflationary pressure.

Major roles played by fiscal
policy
Development of Private Sector: The production and productivity of such
sectors are majorly influenced by fiscal policies like taxation, public
spending and more
Creation of Social and Economic Overhead: Proper basic infrastructure is
the vital requirement for economic development. It includes provision of
social overheads such as health and education services, transport and
telecommunication facilities, power generation etc.

Role of Monetary Policy
• Monetary Policy shows how central banks monitor and
manage liquidity for creation of economic growth.
• The term liquidity shows amount of money supply which
includes cash, credit, checks and mutual funds.

Fiscal and Monetary Policies on
economy
• Monetary and fiscal policies refer as the most widely
recognised tools used for influencing economical activities
of a nation.
• In this context, monetary policy is mostly concerned with
supply of money and management of interest rates.
• Such functions are carried out by Central Banks of a
country.

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Inflationary rate

Impact of fiscal and monetary
policies on organizations
• By high rate of taxation, government can easily pull
money out of economy which slows down the business
activities of organisations.
• Whereas for stimulating economy, regulatory bodies use
fiscal policies which might offer tax rebates or lower taxes
as well.
• Therefore, it has seen that for improving real economy,

Impact of organizations to the
economy
In UK, growth of business of both public and private sectors are
increasing at high rate. This will not only enhance their
profitability but also helps in improving and developing
economy of nation too. Therefore, Government of this nation
also give support to entrepreneurs in launching their business
by arranging proper amount of funds and other resources.

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Vodafone is a private company of UK and considered as second largest
in the world in telecommunication sector. This internet service
provider organisation is established in 1982 and headquartered in
England. Currently it has 17.5 million subscribers which helps in
generating a high revenue. It has operated business in all over the
world and contributed near about 23.7 billion Euro in economic
development after Brexit.
22/09/18