Report on Monetary, Fiscal Policy, and Global Factors in UK Business

This report provides a detailed analysis of the business environment in the United Kingdom, focusing on the impact of monetary and fiscal policies on UK businesses. It defines the business environment, differentiating between micro and macro factors, and emphasizes the importance of a flexible approach for organizations to adapt and grow. The report delves into the UK economy, its structure, and key economic indicators like GDP, discussing fiscal policy as a tool for government influence and monetary policy focusing on interest rate control. It examines the current economic state of the UK, including public finance, debt, spending, and the labor market, covering employment, unemployment, inflation, and interest rates. The report also explores how interest rates affect money supply and demand and identifies potential factors that could lead to an economic crisis in the UK. Furthermore, it highlights the influence of both regional and global factors on business activities, concluding that fiscal and monetary policies play a crucial role in creating employment opportunities and maintaining economic balance.

INTRODUCTION
TO BUSINESS
ENVIRONMENT

TABLE OF CONTENT
■ INTRODUCTION
■ TASK
■ CONCLUSION
■ REFERENCES

INTRODUCTION
■ Business environment can be defined as sum total of all that external and internal factors that
affect business. Macro and Micro both types of factors can impact running of business. Micro
factors that can affect business are suppliers, competitors, employees and market
intermediaries.
■ Macro environmental factors which can affect and influence business activities are social,
economic, technological, environmental and many more. These factors can lay positive as
well as negative impact on working of business.
■ To adjust in business environment organization needs to follow a flexible approach, so that it
can help them in growing. Present report will lay emphasis on impact of monetary and Fiscal
policy on activities of United Kingdom business organization. It will also analyze how the
develop development in global and regional aspects shape business activities. Report will
also lay emphasis on global and regional factors affecting the running of business in United
Kingdom.

Meaning of economy
■ A country’s economy can be defined as the huge
combination of all tasks which are being related to
production and consumption of goods and services
and also the supply of money is being included in it.
■ The economy is defined as a social domain that
emphasize the practices, discourses, and material
expressions associated with the production, use, and
management of resources. Economic agents which
perform all economic activities consists of individual,
business, organization or governments.

Explain how the economy is formed
■ It has been analyzed that economy of United
Kingdom is being considered as sixth largest and
measurement of this has been done by Gross domestic
product.
■ Also it has been considered as ninth largest when
measured by purchasing power and economy of
United Kingdom is taken as twenty second largest
when measured in terms of Gross domestic product
per capita. Economy of United Kingdom is 3.3% of
GDP of world.
■ Various changes have been taken place in structure
which is economic of United Kingdom. It has been
analyzed that changes were really necessary for
development of economy of country.

Explain what is meant by Fiscal Policy
■ Fiscal Policy can be defined as that policy in which
government is engaged in adjusting levels of
spending and tax rates so that they can monitor and
lay impact on influencing economy of nation.
■ This policy is also known as sister strategy to
monetary policy, which is maintained by central
bank and affect money supply of nation.
■ This policy can help country in achieving and
reaching out their economic goals and objectives.
Economic phenomena can be controlled by
government by making use of Fiscal policy.

Briefly explain how this policy came out
■ Fiscal Policy is being given by a famous
theorist and British economist who is known
as John Maynard Keynnes.
■ This theory can also be known as
Keynesian economics. In this theory the
economist has explained that
macroeconomic productivity level can be
influenced by increasing or decreasing
levels of tax and spending’s of public.
■ This impacts in lowering down the rate of
inflation.

Does this policy exist within United
Kingdom?
■ Yes, United Kingdom has taken in account the use of
Fiscal policy. The main objective of United Kingdom
fiscal policy is to cut down the rate of inflation and
make it up to 2%.
■ Also they want that country must have a strong
economic growth but not a growth which is related to
inflation. Fiscal Policy was being used by United
Kingdom because country is facing high risk because
structural changes so inflation can be increased, so in
order to overcome this situation government of
United Kingdom has implemented fiscal policy.

Explain what is monetary policy
■ Monetary policy can be defined as that policy
who is engaged in controlling rate of interest that
can be paid on borrowing which is short term.
This policy is being run authority which are
monetary in a country.
■ Main aim and objective of adopting this policy is
to cut down rate of inflation so that stability in
prices can be maintained by government.

Does this policy exist in United
Kingdom?
■ United Kingdom is engaged in making use of
Monetary policy. Bank of England is being engage in
keeping a pace on monetary policy of United
Kingdom. Monetary policy committee has main
objective of balancing inflation rate of country at 2%.
■ If economic growth is sluggish, then interest rates can
be cut, lower interest rates boost economic growth and
help to reduce inflation. Independent central bank can
carry out transaction related to monetary policy.

What is the current economic state of
United Kingdom
■ United Kingdom has been termed as fifth largest in
the world. They have Gross domestic product of
$2.81 trillion.
■ This figure has been given out by International
monetary fund. There has been a recent report that
Gross domestic product level of United Kingdom
will fall at rank 7.

United Kingdom public finance-
■ Public finance can be defined as the role
which government plays in an economy. In
this branch of economics, it has bene
identified about the revenue of government
and expenditure of government related to
public authorities.
■ Public finance has faced various financial
crisis because United Kingdom economy is
going through a deficit state. It has been
analyzed that government of United
Kingdom has created a debt of £1.78 trillion.