In this part of the assignment I will be explaining how both Fiscal and Monetary policy decisions have affected my chosen business.
The UK government sets monetary policy by adjusting the funds rate. This affects other short-term and long-term rates, including credit-card rates and mortgages. Governments define fiscal policy by setting taxation levels and writing legislation and regulation for everything from health care to the environment. Fiscal and monetary policy changes can affect businesses directly and indirectly.

Fiscal Policy

Fiscal policy is all about how the government controls its spending levels and tax rates to monitor and influence UK’s economy. It is an important factor that leads the country’s economy growth, as its ability to affect the GDP by controlling how much output is produced. It is the way a government uses tax money to influence the economy, so the government might lower tax rates to try to help economic growth. If people are paying less in taxes, they have more money to spend or invest. Increased consumer spending or investment could improve economic growth.

Lower taxes mean more disposable income for consumers. Zara’s customer will be able to afford the clothes that they are selling.
This is what every business goals are, for their consumers to have enough to buy their products. This will be great for Zara because they will generate a lot of profit from this and with the money they can produce new fashion trends which their customers are most likely to buy to generate even more profit.

Monetary Policy

Monetary policy is all about interest rates and the money supply that are controlled by the Bank of England. Monetary policy is one of the ways that the UK government tries to control the economy. If the money supply grows too fast, the rate of inflation will increase; if the growth of the money supply is slowed too much, then economic growth may also slow. In general, the bank of England sets inflation targets that are...