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£1.6 billion boost to the UK economy arising from the World Cup

The cebr has estimated the tournament will have a positive impact on the UK economy, resulting in a net £1.6 billion short run boost to GDP in June and July.

GENERAL MERCHANDISE

£1.6 billion boost to the UK economy arising from the World Cup

The cebr has estimated the tournament will have a positive impact on the UK economy, resulting in a net £1.6 billion short run boost to GDP in June and July.

This will arise through increased consumer expenditure and business spending on advertising, which will be partially offset by productivity losses associated with workforce absenteeism.

The cebr has based their calculations on the bookmakers’pre‐tournament predictions and assumed that England beat all the teams they face with longer odds of winning than themselves and lose to those with shorter odds. Under this methodology England will reach the semi‐finals.

Given the minimal time difference between the UK and South Africa, absenteeism is not expected to be as big a concern as the 2002 World Cup in South Korea and Japan. The impact of the timing of matches in the 2002 tournament probably made the overall economic impact of the World Cup negative for the UK economy.

All going to plan, England’s progress to the semi‐final is predominantly made up of games kicking off at 19.30, minimising the disruption to the average working day. The group stage match between England and Slovenia at 15.00 on Wednesday June 23 is the notable exception, with productivity likely to take a hit. Over the course of the tournament the cebr expects that productivity losses will amount to £0.9 billion to the UK economy.

The main boost to the UK economy will come in the form of increased consumer spending and business spending on advertising. The convenient timings of key games after work and at the weekend is good news for pubs, off‐licences and supermarket who can all expect bumper sales over the next month. ASDA estimates that beer and wine sales will increase by 37% and 41% respectively during the tournament as people hold “World Cup parties”. A blast of good weather would compound this impact.

These factors considered, the cebr estimate is that the World Cup will cause a temporary boost to the UK economy of £1.6 billion, which is roughly the net impact of the increase in consumer and corporate spending and the losses due to absenteeism and reduced productivity.
The knock on effect of the World Cup will be to distort retail sales figures for June and July as consumers are likely to have brought forward consumption that would have otherwise occurred later on in the year.

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