6.2 The Economic Climate Practice Questions

Text 2 — Bellstone Blinds Ltd

Bellstone Blinds Ltd (BB) makes and fits made-to-measure wooden shutters and blinds for homes across the East Midlands. Its most popular product, the Signature shutter, has an average price of £2 400 including fitting. BB employs 48 staff at its workshop in Kettering, including 14 skilled fitters who travel to customers' homes.

BB's directors are concerned about the economic climate. Consumer incomes in the East Midlands are forecast to fall until 2026, and BB's own revenue is forecast to fall in 2025, as shown in Table 1. The unemployment rate in the East Midlands is also forecast to fall, as shown in Table 2. BB recently advertised three new fitter posts but received only two applications.

Table 1 BB's revenue, 2022–2025

Year	Revenue
2022	£1 840 000
2023	£2 050 000
2024	£1 968 000
2025 (forecast)	£1 742 000

Table 2 Unemployment rate, East Midlands

Year	Unemployment rate
2023	4.1%
2024	3.7%
2025 (forecast)	3.4%
2026 (forecast)	3.2%

Brindlemoor Carpets

Brindlemoor Carpets is a showroom in a small market town, owned by Graham Okafor. It sells carpets and expensive leather sofas, and fits carpets in customers' homes. Graham employs four sales staff and three carpet fitters.

Until 2024 the largest employer in the town was a car parts factory. In early 2024 the factory closed and 500 people lost their jobs. Unemployment in the town has risen and many families now have lower incomes.

Before the closure Graham found it hard to recruit carpet fitters. Two fitters left in 2023 to take better-paid jobs at the factory, and one vacancy stayed unfilled for five months.

Table 1: Brindlemoor Carpets' sales revenue

Year	Sales revenue
2023	£480 000
2024	£408 000

Garnmoel Cabins Ltd

Garnmoel Cabins Ltd is a private limited company owned by Rhian Evans. It rents out six wooden holiday cabins on a hillside in Pembrokeshire. A cabin costs £520 a week in the peak summer season and £320 a week at other times of the year. Rhian employs two part-time cleaners from the nearby village. Three years ago she borrowed £90 000 to build two extra cabins and is still repaying the loan.

UK consumer incomes have fallen over the last year and several large employers in west Wales have made workers redundant.

Rhian wants to add a hot tub to every cabin, but she is worried about how the economic climate will affect her bookings. The hot tubs would cost £18 000, which she would need to borrow.

Table 1 shows the number of cabin weeks booked last year. Each quarter has 78 cabin weeks available.

Table 1: Cabin weeks booked at Garnmoel Cabins last year

Quarter	Jan–Mar	Apr–Jun	Jul–Sep	Oct–Dec
Cabin weeks booked	24	52	76	31

Larchgate Fresh

Larchgate Fresh is a greengrocer's shop in Carlisle, owned by sole trader Hannah Nayar. Hannah opened the shop in 2018 and buys almost all of her fruit and vegetables from three farms within 20 miles of the city. She employs two part-time assistants.

Last year a large food-processing factory in Carlisle closed and 300 workers lost their jobs. Unemployment in the area has risen since the closure. Customers are buying smaller amounts and are choosing cheaper vegetables, such as potatoes and carrots, instead of imported fruit. Larchgate Fresh's weekly sales revenue has fallen from £4000 to £3400.

Hannah is considering two options:

• Option 1: sell misshapen vegetables from her three farms at a lower price
• Option 2: start a home delivery service to villages around Penrith.

Table 1: Unemployment rate in four areas of Cumbria

Area	Unemployment rate (%)
Carlisle	6.2
Kendal	2.9
Penrith	3.8
Workington	5.1