Russell Lynch: Is it any wonder that the summer spending boom has turned into a Fosbury flop?

George Osborne will have plenty to ponder when the Olympic caravan finally leaves town

Share
Related Topics

When the greatest sporting show on Earth is finally under way after a seven-year wait, it's difficult to set aside the euphoria and take a hard-headed view of how good the Olympics will be for the British economy. But talk of deserted bars and restaurants in a central London "ghost town" gives us an early warning that the benefit of the Games (whisper it) might not be all it's cracked up to be for a troubled recovery. And after the shock 0.7 per cent contraction between April and June, we could badly do with a boost.

So what do we definitely know about the economic impact? Despite the disappointing ranks of empty seats at venues, the Office for National Statistics estimates that sales of tickets – bought last year but only counted in the official figures now – will add 0.1 percentage points to growth. So that's a good start.

But the other benefits of the London 2012 are more difficult to pin down. For every eager tourist flocking to the capital to visit the Games, another could stay at home or head somewhere else on holiday for fear of disruption, overcrowding and inflated prices. Analysts at Goldman Sachs say the extra spending could add as much as 0.4 percentage points to the economy – about £60bn – but also warn that Games tourists simply crowd out other would-be spenders. There is also the risk that Britons will stay glued to their televisions for the duration of the Games, rather than hitting the high streets to spend their hard-earned cash.

Coping with transport restrictions, such as the "ZiL" traffic lanes reserved for officials and athletes, is also an issue when London is such a key driver of the overall economy. The big property landlords who own swathes of the West End have for months been braced for transport disruption and lower visitor numbers.

Because of the extra working day, the economy is virtually guaranteed to bounce back by about 0.5 per cent in the current quarter. If the Olympics can add another 0.5 per cent to that, the prettier growth figures would certainly to help ease the immediate pressure on the Chancellor. The bigger problem for George Osborne is that the underlying economy hasn't shown any growth for two years. He has plenty to ponder when the Olympic caravan finally leaves town.

React Now

iJobs Job Widget
iJobs General

Mobile App/IOS Developer (C#, ASP.NET, .NET, MVC)

£50000 - £60000 per annum + Benefits + Bonus: Harrington Starr: Mobile App/IOS...

Front End Developer-JavaScript, Angular J.S, HTML, CSS, ASP.NET

£40000 - £45000 per annum + Benefits + Bonus: Harrington Starr: Front End Deve...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Day In a Page

Read Next
 

i Editor's Letter: Only a game? Far from it

Oliver Duff Oliver Duff
Abu Bakr al-Baghdadi speaking at the Grand Mosque in Mosul  

The al-Baghdadi doctrine: leading British Muslims offer their response

Independent Voices
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil