Economics, International economy, Pethokoukis

How the royal baby will affect the UK economy

Image Credit: Royal Family on Shutterstock

Image Credit: Royal Family on Shutterstock

Not to say we have to monetize everything or think about the monetary impact, but royal babies are good for business. IHS Global Insight:

At the margin, the royal birth may provide the [UK] economy with a temporary, small positive boost at a time when it seems to be increasingly moving in the right direction.

1. Any economic impact from the royal birth should be clearly positive, as there are no obvious negative economic repercussions of the happy event. This notably contrasts with the Queen’s Diamond Jubilee celebrations in 2012 and the Royal Wedding in 2011 when the major difference was the granting of an extra day’s public holiday to celebrate the events.  …

2. The most obvious support to the economy coming from the royal birth will be some boost to retail sales through people buying souvenirs and commemorative items, while there is also likely to be a small lift to alcohol sales as some people will want to toast the Royal Baby. There has also been a boost to the bookies through people betting on the sex of the baby and its name. However, even the boost to retail sales from the royal birth needs to be qualified by the possibility that the buying of souvenirs and commemorative items may be displacing some other discretionary spending.  …

3. There may also be a limited “feel good factor”, especially as consumer confidence is currently on the rise, helped by some improved news on the economy and possibly further fuelled by the extended good weather and a number of recent sporting successes (the Ashes, Andy Murray winning Wimbledon and Chris Froome winning the Tour de France). …

4. But another significant difference with both the Queen’s Diamond Jubilee celebrations in 2012 and the Royal Wedding in 2011 is that there will not be the great pageantry and celebratory public events, which likely had some beneficial impact in lifting tourism. Having said that there is a lot of international interest in the royal baby with high foreign media coverage, which does help to advertise the UK globally.

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