1. Economic Conditions Business Cycle Interest rates Legislation Exchange rates

2. Business Cycle Boom: Productive economy Customers buy more Businesses produce more therefore need more staff Wages increase Prices get pushed up Recession: economy is in decline Customers not spending so much Production is cut back Unemployment increases Income falls time £ Boom Slump Recession Recovery

3. Interest rates Bank of England sets the interest rate Base rate is approximately 3% Interest rate could change on a monthly basis Interest rate Rise: Makes borrowing expensive Makes saving good Interest rate Decrease: Makes borrowing cheap Little return on savings

4. Exchange Rates “value of the pound against other currencies” UK businesses need foreign currency to trade with other countries. Other countries need pounds to buy British goods Example: If the exchange rate is $2 to £1, and an order from the USA costs $100, then the UK business will need to buy £50 worth of dollars to buy the goods!

5. Legislation Laws are passed by the Government to protect people Consumer Laws: Trades Description Act 1968 Sale of Goods Act 1979 Consumer Protection Act 1987 Employment Laws: Sex Discrimination Act 1975/1986 Race Relations Act 1976 Disability Discrimination Act 1995 National Minimum Wage Act 1998 Health and Safety at Work Act 1974