“With reference to organisations or industries that you know, to what extent do you think that recent changes in the UK economy will have inevitably damaged the long-term profits of businesses that operate in this country?” (40 marks)

Long term profit is the financial return or reward that entrepreneurs aim to achieve to reflect the risk that they take. Generally, the capital leftover after costs have been subtracted from revenue. The UK economy is an entire network of producers, distributors and consumers of goods and services in a national community. The economy in the UK is in recovery after a recession in 2008-2009, and therefore it is strengthening and past the pre-slump peak.

Gross Domestic Product (GDP) is a measure of a country’s economic activity, including all goods and services produced in a year; economic growth shows the increase in output of goods and services compared with the year before. In the second quarter of 2015, the United Kingdom’s economy has grown 0.7% (Office of National Statistics) and was worth approximately £1.51 million back in 2013, when annual growth was 3.2%. Due to the UK economy recovering, the country’s GDP is also growing positively, this growth creates more opportunities, as consumer tastes change because it becomes easier to setup or expand a business in a rapidly growing economy. In addition, new gaps emerge in the market, establishing more opportunity for promising entrepreneurs, as well as returning consumer confidence to spending. Multinational public limited clothing retailer, Next, has reported an increase in half-year profits as the economic growth has fed into household spending allowing for more disposable income to be spent on goods. To some extent, this shows that the current recovering state of the economy has positively affected Next’s profits, shown in the 7.1% growth of profit, from £324 million in 2014 to