In this report, I will be talking about how Taylor Wimpey would be influence economic factors in a time of economic growth and economic recession in the UK economy.
P5: Describe the influence of two contrasting economic environments on business activities within a selected organisation
Growth occurs when more goods are being produced and consumed, and also incomes are rising. During growth consumers spend more money on goods and services as they have more disposable income and during growth the incentive for consumers is to carry on spending. Businesses would invest more and hire more labour as it links to the increase of demand.
In Times Of Economic Growth
Key Indicators:
Impact On Key Indicators:
Impact On Taylor Wimpey:
Interest Rates
During times of economic growth, interest rates will be at an all-time low for E.g. The current interest rate is at 0.5%. The UK has had interests off 0.5% for since 2009. This suggests that since this monetary policy is enforced by the monetary policy committee, this results in them suggesting to help increase
1st Link.
Interest Rates will have a considerable effect on Taylor Wimpey as during economic growth, interest rates will be at an all-time low, which gives consumers the incentive to buy houses as consumers are now able to afford mortgages at the given base rate. This suggests that during economic growth Taylor Wimpey due to interest rates being low, this will increase the demand and the house prices themselves, which is beneficial to this organisation as it means they can increase their profits.
Unemployment
In times of economic growth unemployment may not be affected and will be low during growth, however the economy may be at its maximum productive efficiency which suggests
Unemployment won’t have as much off an effect on Taylor Wimpey during economic growth, as the demand will increase for...