The London 2012 Olympics is a fantastic opportunity to showcase the best of Britain and make it clear to visitors and spectators from across the globe that we are ready to trade with the world. We believe the Olympics will provide a timely confidence boost for businesses, particularly in the retail, hospitality and leisure sectors, and for the UK economy as a whole. The “feel-good factor” surrounding the Games is especially critical in the wake of the very poor GDP statistics released earlier in the week. The relaxation of Sunday trading laws will help many businesses reap the benefits from the influx of tourists. This eight week period will serve as a useful trial to provide evidence as to whether the relaxation of Sunday trading rules on a permanent basis would provide a boost to the economy in the long term.
John Longworth is director general of the British Chambers of Commerce.
In the short term, the impact of the Olympics on the UK economy is likely to be negative because of the upfront spending required for infrastructure and security. This will only be partly offset by the spending of visitors and athletes. The benefits tend to come over the long-term, as we take advantage of improved transportation and new construction. The more direct beneficiaries could be domestic construction or engineering firms, but in fact they’ve performed in line or worse than the market over the last 18 months. Hotel, restaurant, and leisure companies have been doing better this year, though again it is not certain revenues will actually be higher than they were last summer. As for sterling, it is hard to see how any impact from the Games won’t be overwhelmed by other forces affecting the dollar or euro.
Dan Morris is global market strategist at JP Morgan Asset Management.