Video report - pound hit by falling inflation

I am borrowing this idea from Amy Chapman on the GCSE Economics blog - it is a really useful and simple video of Stephanie Flanders’ report on the BBC news yesterday about the effect that falling inflation is having on exchange rates, and how that impacts on exporters as well as on those needing to buy other currencies which would make a great lesson starter or discussion piece on the risks of overseas marketing.

Revision Presentation - Exchange Rates and Business

This streamed revision presentation looks at the topic of exchange rates. What are they, how are they determined and what are the business implications of fluctuating exchange rates?

Pay-as-you-go holiday spending money

As sterling is so much weaker than it was a year ago, anyone travelling abroad for their summer holidays is going to find that their spending money buys far less. One result of this is that fewer of us are travelling abroad – see Innes Robinson’s piece ‘Recession hits Tenerife beaches’ on the GCSE blog, with its link to a video report on the BBC website showing glorious empty beaches, and the business closures, cancelled flights and growing unemployment in Tenerife as a result. Another result is that holiday makers will feel that their spending budgets are under pressure, and finding the best exchange rate could make a big difference. The BBC found that the cost of buying 500 euros varied hugely, from £423 to £463, which really makes shopping around worthwhile. 

Fantasy Football hit by the weakness of sterling

Imagine, for a moment, that you are a top European footballer, perhaps from Italy, Spain or Portugal – something like Cristiano Ronaldo but better looking and more modest. Now imagine that two years ago you signed for a top Premiership club, perhaps Chelsea or Manchester United, for a transfer fee of around £25million plus a weekly salary of £100,000 – a reasonable and modest sum, given the quality of your football. When you started to play in the UK the top rate of tax was 40%, so after the first week when you benefitted from the lower tax rates on the first £40,000 or so of your annual pay, you have paid £40,000 income tax per week. But next April the top rate is set to rise to 50%, so your net (or take-home) pay will fall by a further £10,000 per week. Will you have to start watching your spending a bit more carefully?

A boom period for the UK domestic holiday industry

This short BBC video is a really useful stimulus piece for students who could look at how demand for domestic leisure trips (holidays, day visits, short-breaks) has boomed during 2009…

Sources of finance - debentures in action

As a source of finance, debentures are pretty rare in the corporate world.  So its always good to grab a recent example of how they work!

Geoff’s article in the Economics Teacher Blog on debentures issued by Wimbledon should do the trick nicely!

Video Case Study - Exporters Benefit from a Weaker Pound

This super video clip is an excellent example of how the recent weakness in the Pound can generate sales opportunities for exporters.  With a price advantage of around 25-30%, exporters with the right product and a suitable promotional mix can win significant new business during 2009 (we need them to!). A great video too for explaining in simple terms how an exporter can hedge the risk foreign exchange fluctuations. Certainly worth showing to the A2 students…

Download student worksheet (pdf) and video link