Buenos Aires Weather | Jubilee boost then brake expected for UK economy

Queen Elizabeth II’s Platinum Jubilee is expected to give Britain’s retail and tourism sectors a boost but could also slow the sluggish economy, analysts said on Wednesday.

Thursday marks the start of four days of festivities to mark the 96-year-old monarch’s record 70 years on the throne.

With two public holidays on Thursday and Friday, then the weekend, the supermarket chain Co-op predicted “a period of sales more important than Christmas”.

“Sales are expected to surge as the bank holiday weekend approaches, with shoppers expected to flock to stores on Wednesday,” he added.

He predicted a 10% increase in wine sales alone and expected to sell 500,000 bottles of sparkling wine and 30,000 bottles of champagne.

Double the amount of English fizz was also predicted to fly off the shelves, as people seek to toast the occasion with a taste of patriotism.

The UK government has said more than 200,000 local events and street parties are expected to take place across the country over the four days.

VisitBritain, which promotes British tourism, said the celebrations could bring in some £1.2 billion ($1.5 billion, €1.4 billion) to the economy.

Some 5.3 million Britons are likely to miss work, he added.

“Jubilee-themed products” such as corgi-shaped cakes, cupcakes and pies have also proven popular, a spokeswoman told AFP.

‘Hangover’

Susannah Streeter, an analyst at Hargreaves Lansdown, said grocers were “ready for a mini-boost in sales”.

At the same time, hotels and restaurants as well as tourist activities that have been hit hard during the pandemic will benefit, she added.

VisitBritain estimates that Covid has cost the UK tourism sector up to £97.1billion in 2020 and 2021, mainly due to a lack of overseas visitors.

But Streeter said the extra-long weekend would likely see a “dip in productivity, as flags waving, parties and barbecues replace hours spent typing on keyboards and in factories.”

Golden Jubilee celebrations in 2002 saw production fall by 5.4%, and it fell again in 2012 for the Queen’s 60th birthday, she added.

“So don’t be surprised if a hangover comes in the form of a hit to economic output in the June GDP (gross domestic product) snapshot after all the fun.”

But Michael Hewson, an analyst at CMC Markets, said historical data showed any pullback would be temporary and productivity would rebound.

In 2002 and 2012, he said, “we saw a strong rebound the following month.”

“If, as seems likely, the UK economy contracts in the second quarter (second quarter) of this year, the Jubilee bank holiday is unlikely to be the main reason,” he added.

Greater responsibility should be placed on consumers spending and traveling less amid a cost-of-living crisis because government taxes are also rising, Hewson said.

by Véronique Dupont, AFP

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