UK Economy: Analyzing Lockdown & Ukraine War Economic Impacts

This report examines the impact of the Covid-19 lockdown and the ongoing Russia-Ukraine war on the UK's economy, utilizing the circular flow of income model to explain the effects. It details both short-term and long-term economic impacts, including disruptions to logistics, import/export challenges, organizational shifts, and energy supply issues. The report suggests economic recommendations for the UK government to mitigate negative impacts, such as diversifying energy sources, attracting businesses relocating from Russia, and supporting local organizations. Additionally, it proposes measures for the Central Bank of UK to remedy destructive impacts, including maintaining interest rates and liquidity. The analysis concludes that the war significantly affects the UK economy and emphasizes the importance of proactive strategies for economic recovery and stability. Desklib provides a platform to explore similar solved assignments and study resources.

Contemporary Business
Environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
With use of circular flow of income, Provide explanation related to main accord of lockdown
on the UK’s economy..................................................................................................................1
Provide explanation related to effects of ongoing war in Ukraine on the UK’s economy? In
relation to both the long-term and short-term economic impacts.............................................2
Suggests economic recommendations for government of UK to redress any negative impacts
of the Ukraine war economy of UK?..........................................................................................3
Provide different economic recommendations which helps the Central Bank of UK to remedy
the destructive impacts of the war in Ukraine in economy of UK?............................................5
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Political disturbance becomes new normal of world under which all countries tries to
dominate another country to establish their control in the market. These political differences not
only impacts main defaulting parties of disputes but their negative impacts also bear by other
countries. Russia-Ukraine war is best example for this because the war shed between two
countries but their negative impacts are faced by economies of all countries. Economies of
countries are having worst impact of this war and the economy of United Kingdom also faces
different types of problem due to this war. It is very important for United nation to stop this war
because the negative impact of this war can ruin whole global economy. It p rovides description
related to impact of war on economy of UK. This report is based on analysing the impact of war
on economy of UK and also different types of recommendations which can be used by
government to minimise negative impact of war.
MAIN BODY
With use of circular flow of income, Provide explanation related to main accord of lockdown on
the UK’s economy.
The circular flow of income or circular flow is a model of the economy in which the
major exchanges are represented as flows of money, goods and services, etc. between economic
agents. All financial corporations such a international monetary funds forecast the slowdown of
economy due to COVID outbreak which is estimated to be larger than the economic slowdown
of 2008 and 2009. There are different types of restrictions are applied by state for protection of
public health under which lock down is prime object of state (Afolayan, 2021). At the time of
pandemic, all the non-essential business activities are ordered to be closed which in result the
shutdown of major industries and companies. This disables the wheel of business in market on
which economy of country are depend and faced extensive slowdown. All three approaches of
GDP are impacted due to COVID such as income, expenditure and production which ruins the
circular flow of income of country. The brief discussion related to these approaches are given
below:
Production: It is expected by all monetary agencies that production of countries will be
slowdown to huge number due to decrease in demand of product and services in market. This
decreases sales turnover of many organisations which enables them to close down their business
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permanently. The negative impact of slow production also based on employment aspect which is
important factor of economy of a nation that is UK.
Income: The negative impact of COVID pandemic leads to decrease production and
supply of country which in return to directly impacts human capital of country. Different types of
production units shuts their process due to low demand so large number of workers lost their job.
This increases unemployment rate of country which takes economic growth in slowdown
(Belyaeva, 2018).
Expenditure: At the time of COVID all markets and shops are remain to be close which
are centre of public expenditure. The expenditure of public are depend on many factors such as
income, preference markets and many more. All these aspects are negatively impacts by
pandemic which directly impact public expenditure and circular flow of income.
Provide explanation related to effects of ongoing war in Ukraine on the UK’s economy? In
relation to both the long-term and short-term economic impacts.
The Russia-Ukraine war is prime centre of focus of world under which all countries and
their delegates puts their eyes on war so that their country can be protected from negative
impacts of war. There are large number of collateral aspect are present of this war which
negatively impact the economies and other aspect of countries. The brief discussion related to
long term and short term impact of this war on United Kingdom are given below:
Logistics: The level of import and export within Russia and UK are very high under
which UK is the biggest importer of vehicle to Russia. One of biggest negative impact of Russia-
Ukraine war is placed on logistics management of both countries. The firms of UK faced large
number of restriction for import and export their goods to Russia which in return to effects the
economy. Maersk and MSC which is logistic giant of market disallow all booking and cargo for
these countries due to implementation of emergencies and disturbances (Bogdan and Beata,
2018).
Import and export: There are different types of sanctions are made by government of
UK on export of specified goods to Russia will negatively impact the long term relation of
countries. The goods which are restricted to be export are Dual use goods which are having
military usage. Several number of sanction are also put in relation to financial and banking to
protect the misuse of funds for war purpose. This negatively impacts circular flow of income and
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also capital formation in all countries and ultimately made many financial crunches for economy
of UK.
Shift of organisation: There are large number of firms and businesses are present in
Russia which shift their business to other countries and leaves Russia due to reputational
concerns. Apple, General motors are the organisation which shift their business. The shift of
these organisation creates large number of financial crunches for countries which negatively
impacts global economy (De Giacomo, and Bleischwitz, 2020).
Energy supply: Russia is the biggest supplier of energy in world and supply 17% of total
natural gas to the world. It is the largest supplier of energy in Europe under which US and UK is
the biggest importer. Any disruption in supply of energy can cause huge fluctuation in oil and
energy prices which impacts the economy of UK in long term.
Suggests economic recommendations for government of UK to redress any negative impacts of
the Ukraine war economy of UK?
The war of Russia and Ukraine are having many negative impact which are having scope
to ruin the whole global economy because of Russia's dominance in international market. Russia
is one of powerful economy of world which always remember in the market due to their
dominance and arrogance. The leaders of countries believes on using disturbing ways to answer
any actions in international market. The approach of their leaders are not impacted due to
external pressures so it becomes essential for other countries to make changes in their policies
for protection of war. There are different types of recommendations are present in market which
can be used by UK government to minimise negative impacts of Russia-Ukraine war. These
recommendation helps government to analyse situation in effective manner so that strategies can
be developed which helps to minimise negative impacts of war (Fascia, 2018).
 Russia is one of the biggest exporter of energy in international markets which helps them
to enjoy dominant position. It is important to minimise this dominance of Russia if world
can stop such type of negative actions from country. The energy supply to world
provides many assistance to Russia such as financial, social and many more. It is
important for other countries to find natural resources in other areas so that dependency
of world on Russia can be minimise. It is recommended to management of United
Kingdom to develop effective business relations to other countries which supplies
natural gas and energy so that dependency of country on Russia can be minimise. This
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also helps to protect the fluctuations in prices due to behaviour of Russia if their share in
market may be minimised and dominance position can be weak.
 The invasion of Ukraine by Russia is one of most unsupported act of country which
receives criticism not only from nations but also from companies or business
organisation. Large number of nations are present which provides their support to
Ukraine in international meetings and boycott Russia. The result of negative act done by
Russia on Ukraine demotivate many international organisations to operate their business
in Russia due to some reputational concerns. Apple, General motors are the organisation
which shift their business to reflect their criticism towards the country. It negatively
impacts the economy of Russia but also the opportunities for other countries of world
because these companies requires place to set their business again. It is recommended to
the government of United Kingdom to develop different measures which helps to attract
these companies towards the nations. It is important for the country to provide different
types of resources to these companies which helps to attract them.
 United Kingdom is the biggest exporter of vehicles to Russia under which huge revenue
came from this source. The export of vehicle to Russia covered large part of UK
economy. If relations between the countries becomes ruins and impacts the exports then
it become blunder for economy. It is important for government to minimise dependency
of UK on Russia in terms of exports so that situations can be controlled. It is
recommended to Government of UK to find more business partners in the world which
can be controlled the export of company.
 It is recommended to the government of United Kingdom to support their local
organisations so that it becomes possible for them to improves their economy.
 There are different types of economist are present which are having effective knowledge
of economic recovery which is recommanded to be hired by country for maintenance of
economy (Fascia, 2018).
 It is recommended to use effective and advance technology in the market which helps to
established effective control on resources of the country.
 The effective research of market should be primary focus of government because it
enables the information of all disturbing factors and opportunities. It enables government
to develop counter strategies for the same.
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 It is recommended to government to develop effective relations with other countries so
that it becomes possible for them to maintain their trade in effective manner.
Provide different economic recommendations which helps the Central Bank of UK to remedy
the destructive impacts of the war in Ukraine in economy of UK?
The central bank of UK are responsible for all monetary and economic aspect of country.
The duty and responsibility of maintaining liquidity and monetary aspect are conducted by this
organisation. It is important to suggest different types of measure to central bank which helps to
maintain economy, circular flow of income and many economic aspect. The brief discussion
related recommendations are given below:
 It is recommended to management of central bank to maintain different types of interest
rates which helps to maintain economy.
 The development of effective strategies for economy is important which helps them to
overcome from different types of negative impacts of economy.
 It is recommended to central bank to maintain level of liquidity in country which helps to
maintain capital formation in country which helps new business to operate their business
in effective manner (Jabłoński and Jabłoński, 2020).
CONCLUSION
It is concluded from this report that wars is one of the most biggest negative factor of
world which not only impacts main parties but also covers global economy. It is concluded from
this report that negative impacts of war impacts economy of UK. This report concludes number
of recommendation to UK government and central bank to overcome from negative impacts of
war.
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REFERENCES
Books and Journals:
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Belyaeva, Z., 2018. Business environment challenges and trends for contemporary SMEs in
Europe. The sustainable marketing concept in European SMEs.
Bogdan, G. and Beata, G.F., 2018. Chances and Challenges for Contemporary Business–from
Human-Centred Design Philosophy to Omnichannel Environment. Handel
Wewnetrzny, (376), p.73.
De Giacomo, M.R. and Bleischwitz, R., 2020. Business models for environmental sustainability:
Contemporary shortcomings and some perspectives. Business Strategy and the
Environment, 29(8), pp.3352-3369.
Fascia, M., 2018. Contemporary Elements of Business Philosophy and Knowledge from an
Ignatian Perspective. Available at SSRN 3141136.
Fascia, M., 2018. Hegelian Approach to Leadership Analysis in Contemporary Healthcare
Environments. Available at SSRN 3141144.
Jabłoński, A. and Jabłoński, M., 2020. Social Issues and Sustainability in Contemporary
Business. In Social Business Models in the Digital Economy (pp. 1-24). Palgrave
Macmillan, Cham.
Kalitanyi, V., 2019. Global Business Environment. In Contemporary Multicultural Orientations
and Practices for Global Leadership (pp. 1-24). IGI Global.
Liu, Y., 2021. Business Environment Construction and Its Prospects in China’s Logistics
Industry. In Contemporary Logistics in China (pp. 199-222). Springer, Singapore.
Mohammed, S., 2021. In the Viscera of Capital: Practical Acceleration in the Contemporary
Business School. In Stories and Organization in the Anthropocene (pp. 51-74). Palgrave
Macmillan, Cham.
Suszyński, C., 2020. Revolutionary context of the evolution of a business enterprise.
In Contemporary Challenges in Cooperation and Coopetition in the Age of Industry
4.0 (pp. 345-358). Springer, Cham.
TAYLOR, S., 2022. Contemporary people management issues. Studying Human Resource
Management: A Guide to the Study, Context and Practice of HR, p.65.
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