Using the data in Extract C, assess the likely impact of the forecast changes in the UK economy on a business such as Mumtaz - Edexcel - A-Level Business - Question 1 - 2018 - Paper 2

The rise in inflation from 1.2% to 2.7% suggests higher prices for goods and services. For Mumtaz, this could result in increased costs, particularly for food and energy. If these costs can't be passed on to consumers, it may affect the profit margins.

With unemployment rising from 4.8% to 6.5%, there may be a reduction in disposable income among consumers. This could lead to a decrease in dining out as families tighten their budgets. However, this may also create a larger pool of available labor for Mumtaz, helping with staffing.

The weaker exchange rate (from $1.23 to$0.99 to the pound) may lead to increased costs for imported goods and ingredients. This is particularly relevant if Mumtaz sources products priced in dollars, leading to tighter profit margins unless adjusted in pricing strategies.