Hello! It’s Maike here, the Community Manager at Pia and it’s my first time posting on the Pia blog. There’s no doubt we’ve all been feeling positive vibes recently with an abundance of sunshine filled weekends, festivals and BBQs. We’re experiencing the longest UK heatwave for decades and it’s not showing any signs of leaving soon. Not to mention the blissful national addiction to watching Love Island, which ends our sunny days by being on our screens every night. Wimbledon queues at record lengths and England having done so well in the World cup, winning penalties and appearing in the Semi-final for the first time since 1990. But what effect has this had our spending habits? And in turn, how has this impacted the UK economy?
With more fans spending money in pubs, buying sportswear, flat-screen TVs and BBQs, sources such as This is Money have estimated the World Cup to have directly influenced a whopping £1.6 billion boost to the UK economy. Comparing this to research from ‘The Centre for Retail Research’ (CRR), in 2014, when England left the tournament before reaching the knockout stages, the economic boost was less than £500 million.
Not to mention the sales of ‘M&S waistcoats’ increasing by 35% due what has been described as the ‘Gareth Southgate effect’. Also with a helpful push from Wimbledon, The Guardian suggested that an additional 10 million pints of beer were bought by England fans due to the football team reaching the semi-final against Croatia on July 11, 2018. The CRR estimated that “Every goal scored by an England footballer is worth £165.3m to England’s retailers and an extra £33.2m to pubs, hotels and restaurants.”
Unfortunately, we didn’t make the final, although rumour has it, that it’s ‘coming home’ in 2022 🦁 🦁 🦁. Marketing Week estimated that if we had made it to the final however, the total economic boost would have been in the region of £2.72 billion!
Nevertheless, things were already ‘on the up’ (just), as the UK economy saw a 0.3% increase in May. As the BBC stated, helped by the Royal Wedding & the warm weather. For example, Airbnb claimed that due to the royal wedding, the local economy of Windsor saw a major boost of over £11million.
What does this all mean for investors… The UK stock market (FTSE 250) has increased by 2.2% since 1st May this year. Typically, there can be a dip this time of year due to the so called ‘Sell in May and go away’ concept. This is where traders sell their stocks in May, and buy again in November. This strategy is so that investors can avoid holding stock throughout the summer months and the expected seasonal decline in the equity markets. During this summer period of quiet trading, stock markets can sometimes be comparatively flat. This rise of the FTSE 250 can help to validate the view that these national events have had a positive effect on the UK economy. Whether this trend will continue towards the end of August remains to be seen.
Throughout history, sporting events have often had a huge impact on the UK economy. .GOV stated that the 2012 Olympic & Paralympic games in Stratford brought a whopping £28 billion, rising to £41 billion if you include the impact of the regeneration of East London. It’s no shock that major events and the economy are inextricably linked. However, it will be interesting to see if these topical events continue having a positive effect on the economy into the Autumn months.
