The Olympic effect - will it reverse the economic rot?

David Cameron will join IMF chief Christine Lagarde, Bank of England governor Sir Mervyn King and ECB president Mario Draghi for the Global Investment Conference - the first major event hosted by the British Business Embassy.

4,000 business leaders, policy makers and investors will participate in the biggest ever drive to attract investment into the UK.

Just as GDP figures show the country is enduring its worst double-dip recession in 50 years with a 0.7% contraction in economic output, the summit will promote the UK while London hosts the Olympics. But will the Olympics reverse the economic rot?

George Osborne said: “Britain has always been a country that is open to the world. In hosting the Olympic Games, we are showcasing that openness.

"As we welcome the world’s best athletes, we also welcome the world’s best companies – so that they can succeed, invest and create jobs in Britain.”

Nick Clegg said the Olympics presents the UK with a "once in a lifetime opportunity to boost the UK’s growth potential," and David Cameron said ministers hoped the event will generate £1bn of UK deals.

The government hopes the Olympics will add £13bn to UK investment and Cameron is also expected to reaffirm his commitment to doubling the UK's exports to £1 trillion by 2020.

UK Trade and Investment (UKTI):

  • hopes the 17 London events and others around the world to promote British business will showcase the UK
  • has identified an additional £4bn of "high value opportunities" such as projects linked to the Sochi 2014 Winter Olympics and the 2016 Games in Rio de Janeiro
  • hopes its new "great" advertising campaign fronted by Dame Judi Dench and Dev Patel will boost the number of visitors to the UK by 4 million from 2011 to 2015, generating a £2.3bn

How far will the Olympics reverse the economic rot or will it be more of a two-week flash in the pan during a worsening economic situation?

Comments
John Stokdyk's picture

Time to start sourcing some numbers

John Stokdyk | | Permalink

 

"By shutting down the City until September?" shot back James Hellyer via his @AccountancyEdge Twitter  account to our question, "Will the Olympics stop the economic rot?"

If swings and roundabouts were Olympic events, they'd be getting a pretty energetic run-out during August. I haven't seen any figures for the expected visitor numbers drawn by the Olympics, nor projections of the amounts they're likely to spend.

Will that offset the festive slump that may set in as people stay in to watch sports on TV rather than going to pubs and restaurants? And in a previous report, we noted how the Canadians have only just finished off paying for the Montreal games and the likelihood that staging 2004 games in Athens may have helped to cripple the Greek economy.

At least we've seen some infrastructure investment in East London, but with costs in the region of £9bn, (and the interest required to service any resulting government debts), we're likely to see a pretty big hangover, I'll bet. Has anyone see figures .

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