TOPIC 3 The impact of external factors

Question 1

Key external factors

Answer 1

Inflation
house prices
economic growth or recession
regulation
exchange rates
interest rates

Question 2

What are the political factors

Answer 2

Regulation
The regulators(FPC,FCA,PRA)
Consumer protection(FOS,FSCS)
Political agenda
Social inclusion and exclusion

Question 3

What was mis-selling PPI

Answer 3

-PPI is an insurance to cover loan repayments if you fall sick.
-Many banks persuaded people to buy it even if they weren’t working
-Now these providers have paid back billions in compensation to consumers

Question 4

A society with full social inclusion has all members

Answer 4

can participate fully in community life
Can influence decisions affecting them
are able to take some responsibility
more equal access to services and facilites

Question 5

What are the economic factors

Answer 5

Interest rates
inflation
house prices
economic activities
the global economy

Question 6

How did covid-19 affect house prices

Answer 6

At the end of 2020 the government stopped stamp duty for a majority of buying which made house prices shoot up.

However when stamp duty was reinstated the prices went down as there was very low borrowing rates

Question 7

What did high house prices lead to in 2007

Answer 7

People with low house deposits having negative equity

Question 8

What happens when the bank rate goes up

Answer 8

Consumer spending and demand go down

Question 9

What are social factors

Answer 9

cultural issues
Multiculturalism
Religion
Youth culture
Grey culture
Consumer culture
Demographics

Question 10

Is the amount of children rising or lowering

Answer 10

lowering

Question 11

During 2007 were there more british people(Birthed) or Migrants (Came over)

Answer 11

Migrants just over half

Question 12

What aspect of finance has automation majorly changed

Answer 12

Credit scoring can now be done by a robot entirely online

Question 13

What factors does automation have

Answer 13

Increasing speed and efficiency
Less face to face advice and sales

Question 14

What are the environmental factors

Answer 14

-Products that are environmentally friendly
should be used
-If theirs a natural disaster banks and
insurance company’s would pay a lot due to
people wanting money, government
intervention would happen

Question 15

What different laws are there

Answer 15

Company law - Covers how business’s are run

Employment laws - sets out how employers must treat their employees

Tax laws - How much tax you need to pay

Proceeds of crime and anti-terrorism - Aim to stop money laundering and stop terrorists using the uk to sort their money out

Accounting standards - Financial services must draw out their annual finance statement compliant with the IFRS

Question 16

What was the cma responsible for

Answer 16

Investigating merges that can restrict competition

Doing studies into markets were there might be market and consumer problems

bringing criminal proceedings against businesses and individuals who
commit an offence, such as taking part in anti-competitive behaviour;

enforcing consumer protection legislation to protect consumers from
unfair trading practices;

co-operating with sector regulators and encouraging them to use their
competition powers.

Question 17

What are Eu regulations

Answer 17

Laws country’s from the Eu have to rely on