London 2012: Ministers and businesses hope medal success will aid economy

Both ministers and businesses are hoping that Team GB's success at the Olympics will help boost the economy.   

They hope the extraordinary Games will deliver a once-in-a-lifetime surge in confidence in Britain at home and abroad, boosting tourism, trade and investment.

However, there were fears in the City that the “golden dividend” will prove short-lived as recessionary reality kicks in after the athletes have gone home.

But with the country basking in the feel-good euphoria generated by its haul of gold medals, the Government believes its Olympic heroes will serve as “a fantastic advert for Britain for years to come”.

Culture Secretary Jeremy Hunt said: “We really want our gold medals to turn into gold for the economy — helping to boost trade and investment for Britain. So far the London Games have exceeded all expectations, and we expect them to bring in billions for the economy.”

Ministers believe the Games will generate £1 billion for the economy, with a further £10 billion in years to come.

Although the West End was much quieter than expected in the first week of the Games numbers are now recovering.

Richard Dickinson, chief executive of New West End Company representing traders in Oxford Street, Bond Street and Regent Street, said: “The images of London’s West End now being seen by billions around the world can only help attract new shoppers from Asia, South America and North Africa, bringing millions of pounds in till receipts over the next four years.”

But many City economists remained sceptical about the benefits. Howard Archer, chief UK & European economist at City forecasters IHS Global Insight, said: “Once the Games are over many people will remember they have not had a pay increase for a long time and still face difficulties paying the bills. Reality will hit home fairly soon.”