Business and Financial Environment

[Name of the Instructor]

Abstract

The financial report on the current picture of investment conditions in United Kingdom. The report will take into consideration the different trends that have an effect on either increase in investments or are leading towards decrease in investment. The financial reports originated by the Central Bank of England and the reports from OECD will help in understanding the current scenario of investment in UK. The report will also give an overview of how the trends affecting the investment in England also have an effect on the different sectors of the economy like tertiary sector, manufacturing or secondary sector and the primary sector of the economy.

Business and Financial Environment

Introduction

The overall financial situation in the world is quite bleak and every country is taking different measures in order to save their country from any crisis. The financial situations all over the world are having downward trends and United Kingdom is one country that has currently hosted Olympics in these crunch financial situations. A country uses its monetary and fiscal policies in order to take steps to control the financial scenarios of the country. United Kingdom comprises of London, Wales, Ireland and Scotland. These four smaller countries contribute towards the economy of the United Kingdom. Many economists thought that the Olympics will open a phase in the economic progress of the country, but short-term benefits were achieved and long-term benefits are still to be achieved. The first thing which comes into mind after these kinds of the events is investment. Investment is to invest some part of the capital in shares, bonds, firms or in any other form. There are returns on investment like dividend from share investment, profit sharing from capital investment and etc. There are different factors that have an impact on the amount of investment coming in and out of the country. A further analysis of these factors will be done in detail and how the increase and decrease in investment have an impact on the different sectors of the economy.

Discussion

In the previous quarter the investment in the business has increased from 6 billion to 30.5 billion which is a 2% increase. The manufacturing investment rose by 0.3% which was an increase of 3.9 billion pounds. The investment in the non-manufacturing sector increased by 2.2% which was increase from 0.6 billion to 27 billion pounds in 2011. As compared to previous years non-manufacturing sector saw more investment then manufacturing sector.

According to Driver and Temple, (1999, pp.2) in order to forecast investment there are several keys that need to be considered: first to develop a forecast and sensitivity of the variables in relation to the macroeconomic variables, demand in the industry and market share, second the effect of public policy on the investment in the existing sectors or in other sectors, third estimation of the values associated with technology and market position and to develop a financial plan of the cost of capital, analysing the hurdle rates and predicting the risk and liquidity constraints regarding an ...