Service industries account for 75 percent of the U.K.'s economic output. Industry accounts for 23.8 percent of output while agriculture represents 1.2 percent. Overall, the United Kingdom's mixed economy has mostly free market features but retains some socialist characteristics, such as the government owning a stake in some industries.
A report to understand how the characteristics of the UK economy, fiscal, monetary and competition polices can impact on an organisation. Within this report I hope determine in detail all the characteristics of the UK economy, government fiscal and monetary policies and how each one effects on the Tesco PLC organisation. I plan to give a clear and comprehensive look into each of the factors which build the UK economy and analyze and evaluate with strong evidence of application to theory throughout the report. The UK subscribes to a democratic, parliamentary system of governance known as the Westminster system. The structure of the administration ensures that there is an adequate separation of powers between Page 2 of 7
the executive branch, led by the prime minister, the bicameral legislature and the judiciary, and that there is a system of checks and balances in place. The current population of the UK is 61.1 million. The UK was one of the largest macro-economy in the world. It was seen to be one of the strongest and most stable economies before 2007, however post 2008 economic deceleration began and the GDP growth rate fell to 0.7%. In 2008, the economy entered into a recession, with a predicted negative growth rate of -4.5% for the following year. (Data monitor Statistics) The current conservative government’s main economic aims are Economic growth with more goods and services produced in the economy, alongside low inflation, little unemployment with a Fair distribution of income. (HM Treasury) Taxation comes in two forms direct taxation (taxation on income and profits) and indirect taxation this is taxation on expenditure (VAT, excise duty). The UK government spends in the region of £400bn a year. Over a third of this money goes in welfare benefits such as pensions, unemployment benefit and other forms of income support. The rest is spent on health, education, defense, roads, law and order and on supporting businesses and local communities. (Data Monitor Statistics)
Businesses can benefit direct or indirectly from the rest of the spending. Governments supply money in the form of grants, subsidies and tax breaks (paying less tax than you should) to encourage businesses in certain areas of the economy. Thus any businesses that are starting out, or are going to provide employment in a depressed area may be able to benefit from such help i.e. Tesco. Tesco is currently the fourth largest retail company in the world (Global Powers of Retailing Report) and is UK’s leading food and grocery retailer. The company operates 4,811 stores in 14 countries worldwide. It operates in the UK, other European countries, the US and Asia. The UK, Tesco's largest geographical market, accounted for 67.6% of the total revenues in FY2010. Revenues from the UK reached £42,254 million ($67,153 million) in 2010, an increase of 2.2% over 2009 (Data monitor Statistics). This is a fascinating statistic, which proves why Tesco along many other companies suffered a hit due to the economic slowdown of 2009. The UK economy contracted 2.4% in the first quarter of 2009, a decline not exceeded in 51 years (Office of National Statistics).
Gross Domestic Product (GDP) increased by 0.8 per cent in the third quarter of 2010, unrevised from the previous estimate. GDP in the third quarter of 2010 is now 2.8 per cent higher than the...