Taylor Swift has already started her Eras Tour in UK. While fans are all euphoric, this time even economists are closely watching the event as strong consumer spending might impact Bank of England's interest rate decision
Taylor Swift has once again caught the eye of economists, and this time it's not just mere consumer optimism at play but the key interest rate decision of the central bank. Last year, her Eras Tour became the highest-grossing event as it earned more than $1 billion.
Swift has already started her UK tour earlier this month. And her events will be clashing with the Bank of England's upcoming rate decision, while UK's economy is still in recovery mode. While the central bank is expected to start cutting rates from a 16-year high of 5.25 per cent, swiftonomics might complicate things a bit.
Nearly all of the 65 economists surveyed by Reuters expect a cut in August, while financial markets are indicating it may occur in September. Last week, TD Securities told CNBC in a report that the economic impact of the singer's Eras tour could possibly lead to a delay in interest rate cut by the BoE.
Figures in line
According to a recent report by Barclays, Taylor Swift's Eras Tour is expected to have a huge impact on the UK's economy.
The tour is projected to bring in nearly £1 billion (£997 million) to the country's experience economy. It is projected that fans could end up spending nearly £848 each on tickets, travel, accommodation, and other expenses related to the tour. This spending is more than 12 times the average cost of a night out in the UK, which is about £67.
In an experience economy, more focus is set on giving customers memorable and engaging experiences, rather than just selling mere products or services.
About 1.2 million fans are expected to attend Swift's 15 performances across four cities this summer. When tickets for the Eras Tour went on sale last July, it sparked a 15.8 per cent YoY increase in UK spending on entertainment as compared to the previous year's figure.
For instance, Swift's shows alone brought an estimated $98 million boost to Edinburgh's economy, as per the Edinburgh City Council.
UK's teetering economic image
While the country continues to witness a declining trend in inflation figures, challenges still linger for UK's economy.
The consumer prices index dropped to 2.3 per cent for the year ending in April, down from 3.2 per cent in March. Despite this positive trend on the inflation front, consumer spending hasn't shown much improvement, painting a cautious picture of the recovery road.
In any case, the Eras tour isn't just a 'worth-watching event' for Swifties, but economists as well who are speculating that Swiftonomics could heavily impact BoE's interest rate decision this time.