Royal marriage likely to be costly to British economy

HIGH PRICE: Today’s wedding will cost the UK more than it will earn

Tourist trade might rocket and sales of memorabilia soar but Prince William’s wedding to Kate Middleton is unlikely to give the economy the boost it needs, says the Confederation of British Industry.

REUTERS

Published: 2011/04/29 07:46:18 AM

LONDON — Tourist trade might rocket and sales of memorabilia soar but Prince William’s wedding to Kate Middleton is unlikely to give the economy the boost it needs, says the Confederation of British Industry.


The body estimates an extra public holiday typically costs the economy about £6bn in lost output.


Even accounting for the feel- good spend factor of royal wedding tourists, the occasion is not the "unadulterated good news" Prime Minister David Cameron calls it.


The last time Britons got an extra public holiday was to celebrate Queen Elizabeth’s golden jubilee in June 2002. In that month industrial production fell by more than 4% and services by more than 2%. Output in both sectors did not return to pre- June levels for some time, official data show. In 1981, when Prince Charles married Diana, the economy contracted 1,2% despite the boost to tourism the July wedding brought.


London can expect a boost. The city hosts about half a million visitors a day on average, according to tourist promotion agency London & Partners. On the wedding day, the agency expects 600000 visitors .


Higher hotel occupancy and wedding merchandise will bring in about £1bn extra for the capital city.


"Straightaway it is a £5bn cost to the economy," IG Index analyst David Jones warns. And the cost could be up to £30bn as the wedding day falls between long weekends, meaning many will take leave for up to 11 days.