World Cup, Heat Wave Help British Economy to Recover
Economists said that the recent world cup combined with the heatwave is helping the British Economy to recover. The economy is recovering from the heavy snowfall earlier this year and the impact of Brexit vote.
Governor Mark Carney of Bank of England believes that bagging trophy in Moscow would be an “unadulterated, unalloyed good” for UK economy’s entirety.
Andy is the chief economist at Threadneedle Street. Meanwhile, he argued that the increase in consumer spending could fulfill the need for higher interest rates. This is despite the emerging feelgood factor about Britain.
On Wednesday, Gareth Southgate will face Croatia. Thus, the England fans are likely to buy 10m additional beer pints with a £30m projected boost for the economy. Moreover, British Beer and Pub Association said that there will be a further £4.5m windfall from beer duties. The reckoning of John Lewis to the triumph of England has also boosted the sales of champagne.
The opening match of England against Tunisia in World Cup has helped consumer spending in pubs made a one-third increase. This was according to Barclaycard’s report.
“Retail sales are on an upward trend. You might see spending on food, drink and things like replica kit – thanks to the feelgood factor and parties – continue over the next few months,” said Mark Gregory, the chief economist at consultancy EY.
In spite of these said benefits from the success of footballing, there are likewise disadvantages. One of which includes the not equivalent benefit between retailers. The higher sales of beer and barbecue weakened the consumer’s spending power for other goods.
The success of the England football campaign is also narrow in boosting the economy. Back in 1990, England team joined the World cup semifinals in In Italy. However, this consequently contributed a 0.7% increase to the economy and on the third quarter, it went to a recession.
During the time that England won the World Cup in 1966, the British were nearly on the pound’s devaluation. This was in the midst of the decline of economic growth and expanding deficit in trade.
“I don’t think any of it really affects the underlying trend in the economy. The bigger issues are what really determines the underlying trend in terms of productivity growth, Brexit and what’s happening in the global economy,” said Chief Economist John Hawksworth of PwC.
Royal wedding, warm weather boost the British economy
The royal wedding and warm weather boosted the British economy. This was after when the economy benefited from a retail rebound with double boosts of the said factors.
In May, the economy surged 0.3pc and there was also a 0.2pc increase in the gross domestic product (GDP). This was according to the Office for National Statistics (ONS).
The two figures are likely in agreement with the expectations of economists. Meanwhile, Rob Kent-Smith is the head of national accounts in ONS. According to him, it presented a mixed view of the UK economy.
“With modest growth driven by the services sector, partly offset by falling construction and industrial output. Retailing, computer programming, and legal services all performed strongly in the three months to May, while housebuilding and manufacturing both contracted. Services, in particular, grew robustly in May with retailers enjoying a double boost from the warm weather and the royal wedding. Construction also saw a return to growth after a weak couple of months,” he said
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