Taylor Swift’s London Eras Tour can delay for Bank of England rate cut: CNBC

Taylor Swift’s record-breaking Eras Tour is significantly boosting consumer spending as it reaches the U.K., potentially complicating the Bank of England’s efforts to control inflation, CNBC reported.

TD Securities told CNBC that the influx of hundreds of thousands of fans to London in August for Swift’s final U.K. performances could stimulate the economy enough to delay a potential interest rate cut in September.

“We still anticipate a BoE cut in August, but the inflation data for that month might keep the MPC (Monetary Policy Committee) on hold in September,” the bank’s macro strategist, Lucas Krishan, and its head of global macro strategy, James Rossiter, wrote in a note Friday.

The Bank of England is anticipated to start lowering its bank rate from the 16-year high of 5.25 percent soon. Among 65 economists surveyed by Reuters, all but two expect a rate cut in August, while financial markets are betting on a September cut.

However, analysts noted that one of Swift’s August tour dates coinciding with a key inflation index day could skew the data, potentially causing the bank to reconsider its timeline.

“A surge in hotel prices could be significant, potentially adding up to 30 basis points to services inflation and 15 basis points to headline inflation,” Krishan and Rossiter told CNBC.

When contacted by CNBC, the Bank of England did not specifically address these comments but stated, “The MPC considers a wide range of economic indicators when making decisions on interest rates.”

The CNBC report also highlighted the well-documented economic impact of Swift’s sold-out tour, with terms like “Swiftflation” and “Swiftonomics” emerging to describe the surge in spending on services such as hotels, flights, and restaurants around her performances.

In Edinburgh, Scotland, where the Grammy winner kicked off her U.K. leg earlier this month, local authorities estimated that the concerts and related spending contributed approximately £77 million ($98 million) to the local economy. Additionally, Barclays Bank projected that the entire U.K. tour could inject an estimated 1 billion euros into the British economy.

TD Securities further informed CNBC that the recent data indicated a significant increase in hotel prices in Edinburgh during Taylor Swift’s visit last weekend, which was described as “larger than usual.” In contrast, the upward pressure on prices was less notable in Liverpool, where Swift concluded her performances in northwest England on Thursday.

Swift is scheduled to perform next in Cardiff, Wales, and later in London this month. Analysts noted that Swift’s Cardiff concert might coincide with a June inflation index day, but they anticipate minimal impact due to the city’s smaller size.

The Bank of England is set to convene next Thursday to announce its latest interest rate decision and provide insights into future inflation trends.

3.6 Crore Indians visited in a single day choosing us as India’s undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.


Published: 15 Jun 2024, 08:40 AM IST

Source link


Leave a Reply

Your email address will not be published. Required fields are marked *

Next Post

Eid-ul-adha 2024: Is the Indian market shut on Monday for Bakri Eid?

Sat Jun 15 , 2024
Stock Market Holiday: The Indian stock market will be closed for trading on Monday, June 17, in observance of Bakri Id. This closure includes all segments such as equity, derivatives, and SLB segments. Normal trading will resume on Tuesday, June 18. Additionally, the Multi Commodity Exchange of India Limited (MCX) […]
Eid-ul-adha 2024: Is the Indian market shut on Monday for Bakri Eid?

You May Like