Research has indicated that English World Cup success could significantly boost the UK economy. The Center for Retail Research (CRR) has already made an estimate that spending already made on World Cup related consumables has added £1 billion to the UK economy. This has been predicted to increase to £2.7 billion if England proceeds to the final.
Spending on World Cup Goods Already £800 million Over 2014 Total
CRR director, Prof. Joshua Bamfield, stated that spending is already £800 million more than was spent during the 2014 campaign. That was when England failed to qualify for the knockout stages. At that time things were also going well, but sales crashed when England crashed! Consequently, not much was expected of England this year but things have now changed!
The World Cup has not only resulted in increased sales of drinks and barbecues, but also of large-screen TV equipment. Many firms that did not do so well in 2017 are now surpassing profits with consequent market improvements. Those who had been planning on buying new TV equipment received the motivation to do so now after the Colombia match.
Increased Spending Would Boost UK Economy
Many different market sectors have benefitted from England’s progress, and this is sure to rocket should they get past Russia or Croatia to reach the semi-final. Other beneficiaries of English success are sales of goods such as football strips, stickers and many different types of souvenirs of the 2018 World Cup.
According to the Bank of England’s chief economist, Andy Haldane commented on how England’s recent success had contributed to the ‘feel-good factor’ among UK consumers who support the English team. He is suggesting that increased spending would aid the economy.
Improved UK Economy Could Lead to Interest Rate Hike
Andy Haldane is also a member of Bank of England’s Monetary Policy Committee. He suggests that a significant improvement in the economy could result in an interest rate rise. Mr. Haldane is known for his desire to get the 2.4% rate of inflation back down to 2%. A rate hike would achieve that. The interest rate was kept at 0.5% in May due to poor UK economic data. However, a good World Cup for England may just be enough to trigger that increase to 0.75%.
Not only that, but the services sector, which makes up about 80% of the UK GDP, has been improving: up 0.4% in the three months to June. This in itself is almost sufficient to trigger an August interest rate hike. A good English World Cup will almost certainly raise the economy enough to clinch it.
