With an international football tournament, the Olympics, major music events and the chance of warm weather, analysts hope the UK economy enjoys a summer heatwave.
Economy Has Turned a Corner
After officially entering recession, there are hopes that the UK economy is going to claw its way back to growth soon. Year-on-year retail sales increased by 3.5% in March.
Growth Above Average
The 3.5% growth in sales is above the average of 2.9% for the past 12 months, according to the British Retail Consortium (BRC) and KPMG.
Early Easter Helps Kick Start Spending Boost
An early Easter is partly to thank for the upturn. Food sales growth weighed in at 6.8% year-on-year over the three months to March.
Analyst Hopes Rising
Linda Ellett, from KPMG, said there were signs of “green shoots” for retailers, as economic indicators were “heading in the right direction with inflationary pressures easing”.
Industry Analysts Saying Weather Not Helping
Helen Dickinson, chief executive of the British Retail Consortium added: “After a difficult start to the year, retailers are hopeful that with warmer weather around the corner, consumer confidence will spring back up.”
Banks Also Noticing Weather Impacting Spending
Head of retail at Barclays Bank, Karen Johnson, said: “The wet weather has been a key factor in the slowdown in discretionary spending, as it’s meant fewer visits to the high street and to hospitality venues.”
Green Shoots Abound
There’s plenty of reasons to believe the summer months will see an uptick in consumer spending. The combination of improving weather, live events and economic factors will all pull together.
Minimum Wage Has Increased
Initially, there’s been an increase in the minimum wage, boosting the spending power of the lowest earners in society by £1,800 per year. This is a timely increase just as summer starts.
Sport to the Rescue
In June we have the European Football Championships, which will usually see a flurry of activity amongst pubs, betting companies, sports retailers and travel agents.
Olympic Summer
Shortly after the completion of the Euro’s, the Paris Olympics will start. These run from July to August and will usually be accompanied by boosts for betting companies and pubs.
Taylor Swift is on Tour
Normally a pop tour wouldn’t raise too many economic eyebrows, but this is Taylor Swift – an industry in herself. She’ll be playing 15 UK dates across the country, and so hotels, restaurants and music venues will be boosted.
Wider Economic Events Could Help
There’s an anticipated reduction in UK interest rates this summer, leading to reduced borrowing costs, lower mortgage payments for many and more disposable income.
Food Inflation Reducing
Analysts say food inflation has been reducing for some time, but in the summer this is likely to accelerate. More domestic food production can lead to lower transportation costs, and lower prices at the till.
Tourist Season Starts
In the summer we welcome more visitors to our shores. Major cities and coastal regions such as Cornwall, South Wales and the East Coast will see visitor numbers increase, giving local economies a large push.
Bank Holidays Abound
The bank holidays in the summer traditionally lead to a spike in spending, as Brits take advantage of the long weekend by enjoying pubs, restaurants and short trips away.
Weather Improvements Help
Good weather also gets people out of the house. Day trips, BBQs, restaurant visits, beer gardens, staycations and the like all help to encourage spending. A good spell of weather can increase economic activity significantly.
Enough to Look Forward to
Even if the weather isn’t as hoped, with so many major events and economic factors pulling together, we’d hope to see an uptick in economic activity this summer.
Economic Improvement Relies on Convergence
In an economy the size of the UK’s, rarely is a single event enough to make much of a difference. In this case though, slowing inflation, lower interest rates, sporting and music events, better weather and time off look promising!
UK Ready For Growth
Having endured COVID, rocketing inflation, rising interest rates, energy and fuel bill increases, and the wettest 18 months since records began, the UK is due some good economic news!
The post UK Pins Hopes on Summer of Sports and Sunshine for Economic Growth first appeared on Swift Feed.
Featured Image Credit: Shutterstock / Melinda Nagy.