Euro 2016 and Rio Olympics set to pump at least £3bn back into UK economy
Britain can expect a significant financial boost from a summer of sport featuring the Olympics and Euro 2016 according to economists’ estimates.
Food, drink, retail and betting businesses are all expected to benefit from a surge in consumer spending this summer as the public cheers on Team GB in Rio de Janeiro and the England, Wales, Northern Ireland and the Republic of Ireland football teams at Euro 2016 in France.
At least £3bn is forecast be pumped back into pubs, supermarkets and sports shops as fans put on their colours and get together to show their support first for the football in June and then at the Olympics a month later.
Carlsberg estimate that the tournament will be worth at least £60m to the on-trade beer market with 12m consumers likely to watch a match in a pub.
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The 2014 World Cup, where England went out at the group stage, is estimated to have contributed £2.5bn to the UK economy in consumer spending.
Yet industry analysts believe that figure could be even higher for Euro 2016 as the British Isles will be represented by four teams for the first time since 1958.
“The better that England tend to do, the better the [economic] impact,” IHS chief European and UK economist Howard Archer told City PM
“The earlier England are knocked out, the less inclined people are to buy any sort of souvenirs, if England get knocked out early you’ll probably find replica shirts in the bargain bin.
“And the more matches there are, the more there tends to be a boost like food and drink.
“There’s usually a lift to the sales of widescreen TVs because a lot of people have decided ‘I was going to get a new TV anyway so I’ll get it now to fully enjoy the football or the Olympics’.
“There’s also an impact on consumer confidence if the home nations do really well, there’s a bit of a feel good factor that can buoy consumption.”
Stock markets could similarly enjoy the benefits of a successful tournament but the risk of an early exit could further dent investor sentiment already dented by EU referendum fears.
"If England proceed a long way in the European championships there's precedent from Euro '96, the economic sentiment was apparent in consumer confidence data at the time, although you can't say with certainty it was causal," said Panmure Gordon chief economist Simon French.
"However, the referendum fits right into the middle of Euro 2016 – you've got the potential that England are out and the referendum happens all by the 23 June and you could see quite the inverse happen."
The Olympics is likely to contribute less additive value to the economy than Euro 2016 with the difference in timezone between Brazil and the UK meaning many of the biggest events will be broadcast late at night to relatively small TV audiences.
“A combination of a successful Euro 2016 campaign and good weather will be a shot in the arm for the economy,” Begbies Traynor managing partner Julie Palmer told City PM
“It’s all the way out in Brazil so it’s obviously not got the same allure of 2012 in London.
“But the events are much more spread out throughout the day and lend themselves a lot better to families watching at home in the evening.
“I think the Olympics might well be overshadowed a little bit by the Euros [in economic terms].”
Simon French agreed: "The Olympics I would expect would contribute far less additive economic impact, given the difference in time zones and proximity."