KCB ID 14414

UK ECONOMY GROWTH FROM DEEP RECESSION: In UK, while considering the level of the decline is found by 2 factors,  After the big fall of international banking system there is more weakness in credit zone.  Failure in spending and producing the products by lack of confidence Recuperating the Economic level is not possible in short period. In 2009, UK GDP falls to 6%. It initially shows the negative GDP in 3rd and 4th quarters in 2008 and the government project there is no growth in country’s GDP till 2010. The analysis reported that the decline will be smaller in continental Europe. The organization for Economic Co-operation and Development (OECD) analysed and reported that retardation has been more “distinct than projected”. As a result, in 2010 the growth forecast for the leading economies reduces to 1.5% from 1.75%.

Due to recession the consumer is less in purchasing of apparels. The retailer already imported huge amount of apparel goods. The inventory level is increased with most of the retailers in UK. As the supplies of apparel is more and demand in the market is less because of recession. The price of apparel is reduced. The less demand in market made the retailers to reduce the garment sales price by giving more discounts is directly reducing their profit margins. IMPACT OF CRUDE OIL PRICE INCREASE:
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To convert the prices from 17. Pound value against the Indian rupee made a huge impact in apparel industry.5% to 20% VAT. VAT made an huge impact to retailer. In March 2010 to June 2010 is worst affected period. The essential commodity product prices will also get increased. India. So the purchasing value of crude oil from the market is indirectly increased. This increase in VAT made the consumers to pay for their purchases. In 4th January 2011. After June 2010 the value of pound is made bit stronger and 2|Page .KCB ID 14414 considering the crude oil production down in 2008 which increases the price of the crude oil from $40 barrel to $92 per barrel. which no other countries in the world attain this growth in the past 1year. So the conversion rate is higher while purchasing importing the crude oil from other countries.5% TO 20% ON 4TH OF JAN 2011: VAT (value Added Tax) is sum of money charged when you buy a goods or services and produces income for a government. Bangladesh etc. Because of increase in transportation cost the apparel product will also get increased. In case of apparel industry.65. Also the purchasing of crude oil is made with other currencies. IMPACT OF DECREASE IN POUNDS AGAINST THEIR TRADING COUNTRIES CURRENCIES: Due to recession in UK and in the other hand the main garment exporting countries GDP growth is increased in considerable level.69 to Rs. Example China. GDP growth is around 5-6%.5% to 20%. Because of recession the pound value is also decreased in the recent months. The value of pound against Indian Currency fluctuates around Rs. Because of this impact the Pound value is weaker against the trading countries currency value and this made the increase of apparel buying cost. UK increased their standard rate of VAT from 17. For example. The increase in crude oil price obviously leads to higher transportation cost of goods. INCREASE OF VAT FROM 17. This will make the retailer to upcharge of price of every garment. the pound value is decreased. he supply chain starts from apparel manufacturer from the abroad to retailer. Increase in crude oil price leads to more inflation in the country.

Till now the value lies between Rs. S.84 NO OF SHIRTS UK RETAILER CAN BUY 11 SHIRTS 14 SHIRTS 3|Page .NO.75. 1 2 SHIRT VALUE IN POUNDS £6 £6 INR VALUE AGAINST £1 Rs.KCB ID 14414 reaches around Rs.66 Rs. Before recession the pound value is stronger and currency conversion rate with INR will be Rs. 80.70-74.

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