• start with the biggest, hardest and most important task first

• take action immediately

• develop a postitive addiction

• practice

• smith proposed the idea of the invisible hand (The unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium) the tendency of free markets to regulate themselves by means of competition, supply and demand,
  and self-interest.

• In his view humans were social creatures who act with a sense of “fair play” in competition and derive pleasure from seeing the wellbeing of others

• Smith believed that governments should not interfere with commerce, he gave this the term, Laissez-Faire (leave alone)

• Smith saw society as perfectly functional and the entire economy as a successful system, an imaginary machine that worked

  
  

Demand is an economic principle referring to a consumer’s desire and willingness to pay a specific price for a specific good or service.

As such, consumers play a vital role in the economic system at a local, national, and global level.

Without consumer demand, producers would lack one of the key motivations to produce i.e. to provide for consumers.

This is why understanding consumer needs and wants is so critical to a successful business – the ability to create real VALUE for the consumer.

In economics, products often have substitutes and the demand for one product can increase or decrease due to the price of the other product going up or down.

What is the substitute effect?
The substitution effect is the decrease in sales for a product that can be attributed to consumers switching to cheaper alternatives.

Fast Fashion brands are probably the best current example of the substitution effect when consumers shifted to a cheaper alternative.
The demand for the traditional brands decreased and the demand for the Fast Fashion brands increased.

Fashion retail substitutes
The existence of substitutes in fashion retail can and does affect sales and performance and potentially lower profitability.
This is because substitutes directly influence the prices of the products and the demand for the products from the customers as well.
In the retail industry, the threat from the substitutes is very high.

When two goods are complements, they experience joint demand - the demand of one good is linked to the demand for another good.

Good recent fashion retail example is during Covid19 there was a shift to wellbeing and health which saw the emergence and growth of many men’s complimentary online beauty and grooming product brands.

Examples of compliment products
While substitute goods can replace each other because they serve the same functions.
Complementary products, however, are items that add value to another complimentary product and often cannot be used separately such as:
Coffee machine - pods
Eyeshadow — brush
Toothpaste — toothbrush
Computer hardware - software
Ink jet printer - ink cartridges

There is an inverse relationship between price and quantity demanded.

A change in the price moves up or down the demand curve.

• Price goes down and quantity demanded goes up
• Price goes up and quantity demanded goes down

price goes up and quantity goes down

If a brand raises its price, some consumers will select a cheaper alternative to buy and vice versa.

Fast Fashion brands are probably the best current example of the substitution effect when consumers shifted to a cheaper alternative.

The demand for the traditional brands decreased and the demand for the Fast Fashion brands increased.

If products become cheaper then the consumer can and will buy more, just because they can and vice versa.

Good example of income effect is the growth and expansion of value stores and supermarkets such as Poundland, B&M, Aldi and Lidl.

Consumers who shop in value supermarkets will be willing to buy more/bigger quantities as the costs are less than in traditional supermarkets.

Examples: buy one get one free

The utility is an economic term used to represent satisfaction or happiness.

The fashion industry by nature supports the Law of diminishing marginal utility as it drives fashion trends and the needs and wants of consumers to consume and buy new products, but once the consumer does not want the

product anymore suppliers and retailers will need to reduce in price and cut margin to try and sell the excess stock.

Decrease in demand will cause a shift to the left

• A preference means that the consumer prefers one thing over another and refers to a persons personal choices in the things that they like.
  Good example:
  Increase in the demand for comfort wear and leisure during Covid19 produced a shift in the demand and growth of businesses selling these types of products.
  

  
  

  2. Number of consumers

• As more or fewer consumers enter the market this has a direct effect on the amount of a product that consumers are willing and able to buy.
  Good example:
  Covid19 lockdown saw increase in number of online consumers as physical stores were closed, since the end of the pandemic there has been a shift back to physical stores (experiential retailing).

  
  

  3. Price of related goods

• The price of related goods is one of the factors that can affect demand. The Related goods are classified as either substitutes or complements.

• An increase in the price of a good will increase demand for its substitute, while a decrease in the price of a good will decrease demand for its substitute.
  Good example:
  Recent shift to people shopping at value supermarkets and retailers focusing on comparative pricing (price related goods) – majority of supermarkets now
  using comparative pricing in marketing campaigns to highlight differences in the prices of related goods.

  
  4. Income

• As consumers’ incomes increase, people have more money to spend. This means that demand for many goods and services will increase as consumers look to spend their extra money.

• If consumers’ incomes fall, people will have less money to spend.

• They will buy fewer goods and services, as they will make do with what they already have.
  Good example:
  Decline of luxury goods/sales during the current cost-of-living crisis, consumers choosing to focus on inferior goods (needs) and less on normal goods (wants)

  
  5. Expectation

• a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases.

• On the other hand, if a buyer expects the price to go up in the future, the demand for the good today increases
  Good example:
  Dynamics and consumer behaviour around Black Friday events and sales performance of products either side of the event Current situation in Israel and the Middle east – economic instability and uncertainty

  
  

The fashion industry is responsible for 8-10% of global emissions, according to the UN.
This is more than the combined emissions from aviation and
shipping.
In 2018, the sector contributed approximately 2.1 billion metric
tons of greenhouse gas (GHG) emissions, accounting for about 4% of the global total.

Greenhouse Gas Emissions:
The fashion industry is responsible for about 4% of global
greenhouse gas emissions, which is equivalent to the annual
emissions of France, Germany, and the UK combined. This
includes emissions from the entire value chain, from production to retail.

Resource Consumption:
Fashion production consumes a large amount of natural
resources. For example, it uses more water than any other
industry except agriculture. The production of textiles and
garments also involves significant energy use, contributing to carbon emissions.

Waste Generation:
The industry generates a substantial amount of waste. Up to 85% of textiles go to landfills each year, and the equivalent of one garbage truck full of clothes is burned or dumped in a landfill every second.

Microplastics Pollution:
Washing synthetic fabrics like polyester releases microplastics into the oceans. These microplastics contribute to ocean pollution and harm marine life.

Fast Fashion:
The rise of fast fashion has exacerbated these issues. Fast
fashion brands produce large quantities of low-cost clothing,
leading to increased consumption and waste. Consumers are
buying more clothes but keeping them for shorter periods.

To mitigate these environmental impacts, the fashion industry needs to adopt more sustainable practices, such as improving energy efficiency, using renewable energy, and promoting circular fashion models that emphasise recycling and reusing materials.

Rising temperatures and changing weather patterns impact
cotton and other raw materials, leading to price fluctuations.

Brands may face increased costs related to energy, water, and waste management.

Supply Chain Disruptions:
Extreme weather events such as floods, hurricanes, and droughts can disrupt the supply chain. Key apparel hubs in countries like Bangladesh, Vietnam, and India are particularly vulnerable. These disruptions can lead to delays, increased costs, and loss of revenue.

Increased Operational Costs:
As the industry moves towards more sustainable practices, there will be increased costs associated with transitioning to renewable energy, improving energy efficiency, and adopting sustainable materials. While these changes are necessary, they can initially strain financial resources.

Regulatory Risks:
Governments around the world are implementing stricter
environmental regulations. Non-compliance can result in fines, increased taxes, and other penalties. Companies may also face higher costs to meet these new standards.

Market Risks:
Consumer preferences are shifting towards more sustainable and ethical products. Brands that fail to adapt to these changes risk losing market share. Additionally, investors are increasingly considering environmental, social, and governance (ESG) factors,which can affect a company’s stock price and access to capital.

Physical Risks:
Climate change can directly impact physical assets. For example, rising sea levels and extreme weather can damage factories, warehouses, and retail stores. This can lead to significant repair and replacement costs.

Reputation Risks:
Companies that are perceived as not taking sufficient action on climate change may face reputational damage. This can lead to a loss of customer loyalty and negative impacts on sales.

By 2030, these countries could lose $65 billion in export earnings (a 22% decline) and nearly 1 million jobs due to slower growth caused by climate-related challenges.

Bangladesh:
As one of the largest garment producers, Bangladesh faces
significant risks from climate change. Extreme heat and flooding threaten factory operations and worker health. By 2030, the country could lose $65 billion in export earnings and nearly 1 million jobs due to slower growth.

Cambodia:
Similar to Bangladesh, Cambodia’s apparel industry is vulnerable to extreme weather events. Flooding and heatwaves can disrupt production and supply chains, leading to financial losses and job cuts.

Pakistan:
Pakistan’s textile sector, a major part of its economy, is also at risk. Climate change can cause water shortages, affecting cotton production, which is crucial for the textile industry. This can lead to increased costs and reduced output.

Vietnam:
Vietnam, another key player in the global apparel market, faces threats from rising sea levels and extreme weather. These conditions can damage infrastructure and disrupt logistics, impacting the overall efficiency and profitability of the industry.

India:
India’s fashion industry is affected by both extreme heat and
water scarcity. These conditions can hinder cotton production and increase operational costs for textile factories. Additionally, the industry must adapt to changing consumer preferences towards sustainable fashion.

China:
As the largest textile producer, China faces significant
environmental challenges. The industry contributes to high levels of pollution and greenhouse gas emissions. Climate policies and regulations are pushing the industry towards more sustainable practices, which can initially increase costs.

Alfred marshall:

Saw that supply and demand work in tandem to generate the market price.

The law of supply:

The amount of producst a firm chooses to produce is determined by the price at which it can sell them.

• side costs e.g. the labour involved, time taken to produce the goods and transportation determines the end value.

  
  

That is the question investors are no doubt asking themselves at Britain’s big investment summit this week.

As the International Investment Summit begins, Brexit is the
elephant standing across our trade flows.

Brexit has not been a “big bang” of damage but a slow drain of talent, investment and, ultimately, growth.

Now the pandemic has receded, that is painfully clear.
Aston University research shows a 27% drop in UK exports and a 32% decline in imports from the EU since 2021, which
translates to an annual loss of £183bn.

• hurricane slashes georgia cotton crop by 20% ( price goes up scarcity)

• social montoring risk- are the workers at risk,

• Flood risk: loss of life, stock loss, production and transport delays, lack of investement in flood prevention could make BD non-viable 10-15 years

• 
  

• patagonia

• Number of consumers

• Asos - during lockdown boosted there revenue due to people buying online as they couldn't leave there houses.

• Price related goods

-

• Income

• Gucci

• louis vuitton

• Expectations

• oil (Middle East)

A producer is someone who creates and supplies goods or services.

Producers combine labor and capital—called factor inputs or factors of production—to create—that is, to output—something else.

Supply can relate to the amount available at a specific price or the amount available across a range of prices.

There is a direct relationship between price and quantity being supplied to the market

• When price goes up then quantity of supply goes up
• When price goes down then quantity of supply goes down

The law of supply says that a higher price will lead producers to supply a bigger quantity to the market.

Because businesses seek to increase revenue, when they expect to receive a higher price for something, they will want to produce more of it.

2. Number of producers
3. Technology
4. Taxes and subsidies
5. Expectations

• An increase in the price of resources causes a shift in supply to the left.

• A decrease in the price of resources causes a shift in supply to the right.

• One of the impacts of the Cost-of-living crisis was the
  increase in inflation and subsequent increase in the general costs of resources which resulted in most producers wanting to supply less products or services to the market.

2) number of producers

• The more producers that are supplying a product or service, the higher the quantity of that product or service supplied there is in the market.

• If, for any reason, more producers enter the market to supply a product, the market supply curve will shift rightward with the quantity supplied increasing at each price level.

• However, often an increase in the number of producers means increased competition, and eventually less-efficient producers will be driven out of the market, causing a supply to decrease and shift back to the left.

• Technological changes can influence the supply of a commodity to the market.

• Advanced and improved technology can reduce the cost of production, which will raise the profit margin for the producer, which will encourage the producers to increase the supply and shift to the right.

  
  

4) taxes and subsides

• Taxes are an additional cost of production that will shifts supply to the left, leading a firm to want to produce a lower quantity at every given price.

• Government subsidies will reduce the cost of production and therefore will increase supply at every given price, shifting the supply to the right.

• The EU and US propose introducing a range of different subsides (good compliance) and taxes (poor compliance) to encourage brands to become more sustainable.

• Fast fashion

  
  

5) Expectations

• if producers foresee unfavourable market conditions in the future such as decreases in the price of their product, they may decide to reduce the quantities they supply, thus shifting the supply curve to the left and
  vice versa.

• The ongoing Israel Middle East conflict may at some point impact on the global cost of oil and gas which could increase inflation and cause a new cost-of-living crisis, like what happened with the Ukraine Russia conflict.

  
  

  
  

Buyers can buy the quantity they want to buy at the market price, and sellers can sell the quantity they want to sell at the market price.

Surplus:
Supply is greater than demand
How does the market manage surplus?
Find market equilibrium by reducing supply price

Shortage:
Demand quantity greater than supply quantity
How does the market manage shortage?
Find market equilibrium by increasing supply price

However, both sides agreed to keep many things the same until 31 December 2020, to allow enough time to agree to the terms of a new trade deal.
Key points:

• While the UK was in the EU, companies could buy and sell
goods across EU borders without paying taxes and there were no limits on the amount of things which could be traded. This is no longer the case.

• Freedom to work and live between the UK and the EU also
came to an end, and in 2021, UK nationals now need a visa if
they want to stay in the EU more than 90 days in a 180-day
period.

Now that it's no longer in the EU, the UK is free to set its own
trade policy and can negotiate deals with other countries.
Talks were held with the US, Australia and New Zealand -
countries that currently don't have free trade deals with the
EU.
https://www.bbc.co.uk/news/uk-politics-32810887

Regulatory Freedom: The UK can now set its own regulations
and standards, potentially reducing bureaucratic red tape and tailoring policies to better suit domestic needs.

Trade Opportunities: The UK will have the freedom to negotiate its own trade deals independently of the EU. This has led to new agreements with countries like Australia and New Zealand.

Control Over Immigration: Brexit will allow the UK to implement its own immigration policies, aiming to attract skilled workers from around the world while managing overall immigration levels.

Economic Resilience: Some argue that being outside the EU
will make the UK less vulnerable to economic shocks that affect the EU as a whole.

Support for Domestic Industries: With fewer EU imports, there could be an increased opportunity for domestic producers to compete and grow within the UK market.

The introduction of new trade barriers has led to a decline in

trade intensity. The UK’s trade with the EU and the rest of the world has not rebounded as quickly as other major economies post-pandemic. This has made the UK less open and less global.

GDP:

The Office for Budget Responsibility estimates that Brexit will

reduce the UK’s potential GDP by about 4% in the long term.

This impact is considered more severe than the economic effects of the COVID-19 pandemic.

Investment:

Investment has also been negatively affected. The uncertainty and new barriers have made the UK a less

attractive destination for foreign investment.

Prices and Costs:
The cost of importing goods from the EU has increased,
contributing to higher prices for consumers. For example, food prices have risen due to increased import costs.

Migration:
Brexit has led to a decline in immigration from EU countries,
which has had mixed effects. While it has reduced the labour supply in some sectors, it has also opened up opportunities for domestic workers.

Overall, most economists agree that Brexit has had a negative impact on the UK’s economy, reducing its real per capita income and making it less competitive globally.

Reduced Trade Volume: There has been a noticeable decline in the variety and volume of goods traded between the UK and the EU. For example, exports of certain products like vegetables and textiles have seen substantial drops.

Higher Costs: The cost of importing goods from the EU has risen, contributing to higher prices for consumers. This is particularly evident in the food sector, where prices for imported items have increased.

Impact on Small Businesses: Smaller exporters have been
particularly hard hit by the new red tape and administrative
burdens, leading some to cease trading with the EU altogether.

Trade Relationships: There has been a sharp drop in the
number of trade relationships between UK exporters and EU
importers, especially affecting lower-value trade relationships

Lower Investment: Business investment has been lower since the Brexit referendum in 2016. The uncertainty and new trade barriers have made the UK a less attractive destination for foreign investment.

Trade Decline: The introduction of new trade barriers has led to a decline in trade intensity. The UK’s trade with the EU and the rest of the world has not rebounded as quickly as other major economies post-pandemic.

Increased Costs: The cost of importing goods from the EU has risen, contributing to higher prices for consumers.

Labour Market Impact: Brexit has led to a decline in immigration from EU countries, which has reduced the labour supply in some sectors. This has had mixed effects, including labour shortages in certain industries.

Reduced Investment Levels: Business investment in the UK
has been notably subdued since the Brexit referendum. Data
indicates that business investment is about 31% below the pre-referendum trend. This stagnation has hindered economic growthand productivity improvements.

Regulatory and Administrative Burdens: New trade barriers
and regulatory requirements have increased the administrative burden on businesses. This has led to higher costs and complexity, particularly for smaller firms.

foreign Investment Decline: The UK’s attractiveness as a
destination for foreign investment has diminished. The new trade barriers and uncertainty have made other markets more appealing to international investors.

Currency Depreciation: The British pound has faced significant depreciation, which has further exacerbated economic challenges and reduced the purchasing power of UK businesses investing in foreign assets.

Increased Emigration: Many EU nationals who were already
living in the UK have chosen to leave, leading to a net decrease in the EU-born population in the UK.

Labour Shortages: The reduction in EU migration has
contributed to labour shortages in various industries. This has put pressure on businesses, leading to increased costs and operational challenges.

Administrative Burdens: The new immigration system has
introduced more complex and costly visa requirements for EU nationals, making it harder for businesses to hire from the EU.

Impact on Higher Education: The number of EU students
enrolling in UK universities has declined, affecting the diversity and financial health of higher education institutions.

• millions of people were infected with the virus as it was contagious and was transmitted through droplets in the air.

• symptons included high temp, fever or chills, feeling generally unwell, cough, change in sense of smell/taste

• ways to prevent it from spreading was to; stay indoors (national lockdown) and vacination.

  
  

Brexit:

to intervene in a free market to set prices.

For example:

The minimum wage makes companies pay a minimum rate to workers at different age bands Government sets an 'Energy Price Guarantee’ due to the rise in household and business energy bills.

keeps below equilibrium

A price floor keeps price above equilibrium and can cause a surplus in the market.

above the equilibrium

A ceiling is the maximum price a seller is allowed to charge.

Price ceiling will reduce quantity and can lead to a shortage of supply.

Example of a price ceiling:

Governments commonly impose controls (price ceilings) on utility prices such as electricity and gas.

Consequently, they want to ensure that these services remain affordable for all customers during financial hardship.

In the UK the government manages this by allowing only a few companies to sell utilities to UK consumers (oligopoly).

Government wants to keep prices artificially high to support a specific sector.

If price goes up producers want to supply more.

Price floors will reduce demand and can lead to a surplus of supply.

Example:

The EU has used minimum prices for agriculture as it has argued farmers' incomes are too low.

Therefore, minimum prices have been used to increase prices above the equilibrium.

This enables farmers to get a higher return and revenue.

The big problem is that this minimum price can create a surplus.

Therefore, the government may have to purchase or subsidise the surplus to maintain a minimum price.

Elasticity of demand coefficient:
The elasticity of demand coefficient
% change in quantity

--------------------------
% change in price

• The movement is insensitive to the change in price

• Inelastic products have very few substitutes and are often INFERIOR products (needs), such as petrol, utilities, cigarettes,salt, peak rail tickets etc.

• A small change in quantity when there is a big change in price the number/coefficient is less than 1 (<1)

  
  

For example:

40% increase in price = 10% decrease in quantity

russia and ukraine war (gas) little to no substitutes - russia turned of and we hand little to no oil.

buying oil for us and middle east ( fearful if anything happens in the Middle East)

Examples:

• gas

• electricity

• The demand is sensitive to price changes.

• These products will often have many substitutes or are NORMAL products i.e. wants, such as fashion or luxury items, soft drinks,cereals, cars etc where consumers have a lot of options and choice.

• A big change in quantity when there is a change in price the number/coefficient is greater than 1 (>1)
  For example:
  20% increase in price = 50% decrease in quantity

Businesses selling unit elastic demand products must carefully assess their pricing structure as any change in price can have a similar impact on demand such as electrical items, digital
cameras, mobile phones, home appliances etc

For example:
20% increase in quantity
20% increase in price

There is no change in quantity with an increase change in price so the
coefficient is 0

Emergency services, drugs, vaccines and essential food items have perfectly inelastic demand as a price increase or decrease
will see no change in demand for such goods or services.

An increase in price has no effect on quantity, so % change is 0.

covid-19 vaccination

perfectly elastic:

An increase in price has no effect on quantity, so % change is infinite.

The demand for the product is entirely dependent on the price of the
product.

Nearest examples could include - high end priced (Veblen or exclusive goods) products such as watches, jewellery, cars, art etc.

There is an infinite change in the quantity with any change in price, so the coefficient is infinite.

We primarily focus on those characteristics which affect the nature of competition and pricing.

Key characteristics of markets:
The main aspects that determine market structures are:
• Number of agents in the market, both sellers and buyers
• Their relative negotiation strength, in terms of ability to set prices
• The degree of differentiation and uniqueness of products
• The ease, or not, of entering and exiting the market

The interaction and differences between these aspects allow for the existence of several market structures.

Perfect competition is a theoretical market structure in which the following criteria are met:

• All firms sell an identical product

• All firms are price takers (they cannot influence the market price of their product) market share has no influence on price

• Buyers have complete or "perfect" information, in the past, present and future, about the product being sold and the prices charged by each firm

• Resources such as labour are perfectly mobile

• Firms can enter or exit the market without cost

Companies are free to set own prices

The flexibility of monopolistic competition allows companies to enter and exit somewhat easily.

Companies in a monopolistically competitive market typically try to differentiate their products to attract more customers.

Key characteristics of oligopoly competition
Oligopoly characteristics include:

• High barriers to new entry
• Price-setting ability
• Product differentiation and non-price competition is allowed
• Few interdependent firms dominate market

Examples of some UK retail oligopolies:
In the UK, for example, an industry with a five-firm concentration ratio of greater than 50% is considered a monopoly
Car industry – Toyota, VW, General Motors and Ford
Petrol retail – Tesco, BP, Shell, Esso and Texaco
Coffee shop retail – Starbucks, Costa Coffee, Cafe Nero
Newspapers – In UK market share is dominated by tabloids Daily Mail,
The Sun, The Mirror, The Star, Daily Express.
Book retail – In UK market share dominated by Waterstones and
Amazon

Characteristics of monopoly competition:

High barriers to entry: Other competitors are not able to enter the market

Single seller: There is only one seller in the market

Price maker: The company that operates the monopoly decides the price of the product that it will sell Price discrimination

In the UK a firm is said to have monopoly power if it has more than 25% of the market share
For example:
Tesco – 27% market share of groceries
Sainsbury’s – 15% market share of groceries
Asda – 15% market share of groceries
Sports Direct - 23% market share of sportswear sector
JD Sports – 20% market share of sportswear sector
A “pure monopoly” is defined as a single seller of a product, i.e.,100% of market share.

"developed."

All developed countries were located in either North America, Europe, or "Developed Asia and Pacific.

Characteristics of developed/ Industrialised nations:
• Their birth and death rates are stable.
• Aging population.
• Have more women working.
• They use a disproportionate amount of the world's resources.
• They have higher levels of debt.

Goods 25% - Services 75%

As a result, developing nations frequently experience a lack of jobs, food, clean drinking water, education, healthcare, and housing.

According to the UN, in 2020, 126 countries were considered

"developing."

All developing countries were located in either Africa, Asia, or Latin America and the Caribbean.

Goods 50% - services 50%

33 Countries are Neither Developed or Developing.

Goods 75% - Services 25%

Sales Decline and Store Closures:
• Shift to online shopping
• Operational challenges
• Financial distress

Retail Sales Volumes:
• Overall decline
• Clothing and Accessories specific impacts
• Ecommerce surge
• Operational challenges
• Recovery and adaption

Supply Chain Disruptions and Job Losses:
• Global disruptions
• Demand shifts
• Technological investments
• Widespread unemployment
• Shift in job market
• Long term changes

Accelerated Change:
• Ecommerce boom
• AR and VR
• Casualisation of fashion
• Sustainability focus
• Local sourcing
• Inventory management
• New business models
• Enhanced customer engagement

Of course, there is controversy among economists regarding the optimal level of government intervention in the economy.

However, the fact remains that government expenditure and taxation programmes exert considerable influence on national income, output and other key macro-economic variables.

If successful, they will shift supply and demand to the right and enable higher economic growth in the long-run.

Interventionist supply-side policies (Keynes)
Involve government intervention to overcome market failure. For example, higher government spending on transport,
education and communication.

Examples of UK government free market supply side action.
Brexit deregulation of EU rules, policies and procedures.

Free trade agreements – Australia, New Zealand, Norway, Iceland, japan, Israel and India

Privatisation – NHS (ongoing stealth policy)

It is the balance between inflation and interest rates that the banks use to try and maintain a stable economy which is good for economic growth and employment.

Monetarism focuses on the role of money in economic fluctuation

• 1. Inflation is caused by excess money in the economy

• 2. Contraction of money flow can be linked to economic downturns

• 3. Fluctuation in the quantity of money causes fluctuation in the price level and its relationship with income/wages

• 4. Manipulation of money supply can impact on balance of payments and exchange rates

• 5. Government short term fiscal or monetary reaction is ineffective (Keynesism)

• 6. Long term monetary policy with set targets is the required for long term economic sustainability

  
  

inflation and intetest rates links back to milton friedman - once we have stability we have smith (anti-keynes ).

If you’re a borrower, the interest rate is the amount you are charged for borrowing money – a percentage of the total amount of the loan Interest is what you pay for the privilege
It's the cost you pay to ‘hire’ someone else’s money.

If you’re a saver, it’s the same except the interest is paid to you – because banks are paying you to hire your money.

DEFLATION is the opposite of inflation, which is marked by a general DECREASE in the prices of goods and services.

Traditionally, aggregate/total economic growth is measured in terms of Gross Domestic Product (GDP), although alternative metrics can sometimes be used.

At dawn, troops and armour crossed into eastern Ukraine from the Russian border, as well as from Belarus in the north and from Russia-annexed Crimea to the south.

Russian President Vladimir Putin made a speech, saying he had decided “to conduct a special military operation ... to protect peoplewho have been subjected to abuse and genocide by the Kyiv regime for eight years,” repeating a baseless claim about Ukraine’s Russian-separatist-backed Donbas region.

He denied, however, that Russia was planning to occupy Ukrainian territories. “We are not going to impose anything on anyone by force.”

https://edition.cnn.com/

• Rising costs – scarcity of oil and gas, drove up energy prices and caused a huge spike in inflation which led to the global cost-of-living crisis

• Disruption to supply chains – availability of raw materials and trade pathways closed

• Market withdrawal from Russia – closure of store and online businesses

• Sanctions and boycotts against Russia – no trade with

  Russia or Russian businesses

• Ethical and social responsibilities – need to take a stance majority in support of Ukraine, including making donations to the cause

Government fiscal policy is often described as either:

• Expansionary
  High spend and borrowing with low taxes Stimulate economy after recession

• Deflationary
  Low spend and borrowing with high taxes Slow down economy after boom period

• UK budget 30th October 2024 – mix of expansionary and deflationary policies (due primarily to the Conservative £22billion black hole)

Private savers also can buy some, but this is less common and usually for smaller amounts, such as Premium Bonds.

The appeal to the investors is that UK government gilts are essentially safe - there is no risk that the money won't be paid.

You won't lose your money, and you know precisely when and how much the payments will be.

That's because many European countries relied on Russia for oil and gas, which is used to power transport and infrastructure.

Ukraine is also one of Europe's biggest exporters of agricultural products, including wheat and sunflower oil.

The war meant that supplies from Russia and Ukraine slowed or stopped completely, and so countries like the UK had to find other ways to get these products.

This led to an increased demand for products that were no longer as widely available. This made the products more valuable and therefore more expensive to buy.

Experts have also pointed to the aftermath of the Covid-19

pandemic, a shortage of workers, and changes to how the UK trades with other countries following Brexit.

https://www.bbc.co.uk

Sales Trends:
Retail trade figures indicate that people are holding off on making non-essential purchases due to cost-of-living pressures.
Retailers experience near-constant sales fluctuations as
consumer behaviour adjusts.

Impact on Revenues:
Major apparel players, including companies have reported a
sharp drop in revenues due to changing consumer spending
patterns.

Navigating Global Trends:
Brands must now be able to adapt to current global trends,
including sustainability, digital channels, and supply chain
optimisation, to thrive in this dynamic and landscape.

Shift to Lower-Priced Alternatives:
Consumers are increasingly opting for lower-priced or own-brand products instead of premium brands. This shift is driven by the need to manage tighter budgets.

law of demand- fast fashion brands e.g. like plt, primark and shein

Impact on Consumer Confidence:
The financial pressures have led to a drop in consumer
confidence, which further discourages spending on non-essential items.

Increased Demand for Promotions:

Impact on Online Retail:

• Shift to Affordable Options:

• Inventory Challenges:

• Impact on Luxury Brands:

  
  

• Operational Costs: