Effect on business

• SPICED-Firms that import will be able to buy cheaper raw material. Firms that export will see less demand for their products.
• WPIDEC-There will be greater demand from abroad for UK goods. If raw materials are imported input prices will increase. Firms are price inelastic products will be able to pass the increase cost on the consumer
• Taxation-Taxation is the process of imposing charges on business and individuals by the government. A cut in income tax may give consumers more disposable income, thus raising consumption. However If income tax is raised this may discourage

  spending and reduce consumption. A cut in corporation tax may increase available profits for firms which may stimulate investment. Changes to VAT will affect the price to consumers and also the costs to a business
• Unemployment-Unemployment is the number of people looking for work but who cannot find a job at a point in time. At times of high unemployment there will be an excess of available workers which should make recruitment easy. Firms can attract workers often offering just the minimum wage. However, there may be a mismatch between the skills of those people unemployed and the skills required for job vacancies.