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

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Teaching Assistant for KS1 & KS2 Huddersfield

£50 - £65 per day: Randstad Education Leeds: We are looking for flexible and i...

Teaching Assistant for KS1 & KS2 Huddersfield

£50 - £65 per annum: Randstad Education Leeds: We are looking for flexible and...

Primary Teaching Supply

£130 - £160 per day: Randstad Education Leeds: Qualified KS2 Supply Teacher r...

Year 1/2 Teacher

£130 - £160 per day: Randstad Education Leeds: Qualified KS1 Teacher required,...

Day In a Page

These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week
The fall of Rome? Cash-strapped Italy accused of selling its soul to the highest bidder

The fall of Rome?

Italy's fears that corporate-sponsored restoration projects will lead to the Disneyfication of its cultural heritage
Glasgow girl made good

Glasgow girl made good

Kelly Macdonald was a waitress when she made Trainspotting. Now she’s taking Manhattan
Sequins ahoy as Strictly Come Dancing takes to the floor once more

Sequins ahoy as Strictly takes to the floor once more

Judy Murray, Frankie Bridge and co paired with dance partners
Wearable trainers and other sporty looks

Wearable trainers and other sporty looks

Alexander Wang pumps it up at New York Fashion Week
The landscape of my imagination

The landscape of my imagination

Author Kate Mosse on the place that taught her to tell stories