Rugby World Cup: UK businesses brush off England defeat

London's blue-chip stock index, the FTSE 100, rose more than 2% in in the first session since England's defeat

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Rugby fans aren’t alone in their disappointment at England crashing out of the Rugby World Cup. The knock on effect of the defeat was expected to extend to pubs, broadcasters and the FTSE 100, who all anticipated that England getting knocked out might take its toll.

The London Business School warned last week that research shows a rugby loss in a major competition typically leads to a next-day 0.15% hit to stock market, which would mean roughly £3 billion being wiped from the value of UK stocks.

But in fact, London's blue-chip stock index, the FTSE 100, rose more than 2% in in the first session since England's humiliating 33-13 defeat at the hands of old rivals Australia.

The surge was triggered by hopes that Friday's downbeat US jobs data would push an interest rate rise further into the future, trumping English investors' rugby blues.

Even World Cup broadcaster ITV, predicted to be the biggest corporate loser due to a possible decline viewership and advertising revenues, was proving resilient.

Shares in the company, which paid £60 million for the right to screen the 2011 and 2015 tournaments, were 1.7%, or 4.3p, higher.

Analysts at Liberum explained that could because TV advertising slots tend to be booked four to six weeks in advance.

"Virtually all the slots for October would already have been booked... so advertising revenues unlikely to be significantly impacted," they said.

Viewing figures may also hold up if the other home nations remain in the competition, and with Wales, Ireland and Scotland's progression looking likely, the Rugby World Cup "is turning out to be an attractive spectacle", they added.

Plus the latest series of X-Factor and Downton Abbey should provide a helping hand.

Britain's pubs were also expected to take a hit, with England fans thought to want to keep a low profile for the rest of the contest.

But the British Beer & Pub Association, however, maintained its forecast that the industry will sell an extra 25 million pints over the course of the Rugby World Cup, anticipating that other supporters and tourists would keep them busy.

"Rugby fans will still be flocking to pubs in huge numbers, are they are best place to savour the big match atmosphere apart from actually being there," said BBPA chief executive Brigid Simmonds.

"The industry is really benefitting from the huge number of overseas visitors, and people supporting other home nations, as the tournament has certainly captured the public’s imagination.

"The Rugby World Cup is still a huge positive for the trade," she added.

 

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