Feel-good factor: What an England victory at Euro 2020 could mean for the economy | Economic growth (GDP)


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On Saturday July 30, 1966, then Prime Minister Harold Wilson took his place in the royal box at Wembley Stadium to watch England versus West Germany.

If ever there was a moment for athletic triumph that sparked an economic feel-good factor, it was when Geoff Hurst sealed England’s 4-2 victory in the final seconds.

It never happened. Not the success at Wembley, but the savings plan announced ten days earlier by Wilson will determine consumer behavior over the next few months.

For football fans, July 1966 is forever associated with the World Cup; for political junkies, it was the month of July measures: spending cuts and tax hikes to ease pressure on the pound sterling. The next 15 months saw a grim and ultimately doomed battle to prevent the pound from devaluing.

Turn the clock forward 46 years to August 4, 2012 for the London Olympics. Within 44 minutes, Great Britain won three gold medals with Mo Farah over 10,000 meters, Jessica Ennis-Hill in the heptathlon and Greg Rutherford in the long jump.

However, whether the nation saw Super Saturday as an excuse to spend more money was difficult to tell from the official numbers. In the fourth quarter of 2012 the economy contracted by 0.3%. A government report that hosting the Games increased trade and investment by $ 10 billion

Some economists believe it might be different this time. According to the Bank of England, consumers have accumulated £ 200 billion in cash reserves due to the lack of spending options due to restrictions over the past 16 months. The supermarkets stock up on beer, champagne and party food for England versus Italy, and the win could well result in a modest increase in consumer spending.

Terry Butcher (left) comforts Paul Gascoine after England’s semi-final defeat at the 1990 World Cup against Germany. Photo: David Cannon / Getty Images

Economist Julian Jessop said any impact football had on anything else in the economy would be far less significant, particularly the lifting of Covid restrictions.

“I would like to say that winning Euro 2020 will boost the UK economy – or at least the UK parts – but it wouldn’t change the fundamentals,” he said

Jessop’s view fits the evidence. When England reached the World Cup semi-finals in 1990, there was no upturn because household budgets were cut by an interest rate of 15%. As Gazza shed tears in Turin, record numbers of people were dispossessed in their homes and unemployment rose to 3 million.

At the time of the next penalty shoot-out in England at the 1996 European Championship, things looked different. Interest rates were lower, the housing market recovered and growth was strong. Success in football was not necessary to create a feel-good factor because the economic situation allowed it to exist anyway.

In the run-up to the Euro 2020 tournament, the economy grew rapidly as it made up for lost ground during the record-breaking production slump last year. This trend is set to continue in the months ahead, regardless of whether Harry Kane becomes the first English football captain to land a major trophy since Bobby Moore in 1966.

That doesn’t mean there won’t be any winners at Euro 2020. Consumption and gambling will increase. Commenting on the latest results for sports betting company Entain, Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Appearing in the finals is an open target for the group and will be a boon to sports betting.”

There will certainly be a feel-good factor for brewers and bookmakers.

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About Nina Snider

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