The Royal Wedding between Prince Harry and Meghan Markle should have some benefits for the UK economy, although we suspect the overall impact will be limited, says EY Item Club.
Economic impact of the Royal Wedding – EY ITEM Club comments
- Sectors likely to benefit include retail, tourism and, possibly, catering
- There may also be a temporary lift to consumer confidence coming from a “feel good factor”
- As the wedding is taking place on the weekend, there is less likelihood of a negative impact on productivity as people take time off to watch the wedding
Howard Archer, chief economic advisor to the EY ITEM Club, comments: “The Royal Wedding between Prince Harry and Meghan Markle will be celebrated across the UK this week, and there has been considerable speculation as to how much the UK will also be able to cheer a resulting boost to the economy. The UK economy could certainly do with a lift after a poor first quarter of the year and a slow start to the second quarter.
“There should be some benefits to the UK economy from the Royal Wedding, although we would be wary of over-egging the potential impact or seeking to put a hard figure on the potential gains. We suspect there will be a very limited, temporary boost to the economy focused on some sectors, notably retail, tourism and, possibly, catering and pubs.
“The retail sector will benefit from people buying Royal Wedding souvenirs, such as plates, cups and magazines. There is also likely to be a boost to the retail and catering sectors from sales of food and drink for people holding street parties. Pubs should also benefit as they have been given permission to stay open for longer. However, it should be kept in mind that some of the retail spending may just be switched from spending on other items.
“The Royal Wedding should provide valuable marketing to UK tourism as coverage of the event will be shown around the world. For example, we may see an increase of tourists from America coming to the UK.
“There could also be a temporary boost to consumer confidence due to a feel-good factor from the Royal Wedding. However, this will likely be short-lived as it does not affect the economic fundamentals facing households.
“With the Royal Wedding being held at the weekend, there is less likely to be any negative impact on productivity as fewer people will be taking time off work to watch the event. Also there is no public holiday, as was case with the wedding of Prince William and Kate Middleton.
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