Can the Royal Wedding salvage the national mood?

More gloomy figures on consumer confidence - but we live in hope that Wills & Kate can save the day...

by James Taylor
Last Updated: 19 Aug 2013

Here's a cheery thought ahead of the bank holiday weekend: according to pollsters GfK NOP, consumer confidence fell sharply again during April, slumping to levels only recorded twice in the last 37 years. That doesn't sound like great news for the economy - particularly since most of us are about to disappear for a four-day weekend. But here at MT, we're determined to seek out a bright side: perhaps the imminent nuptials of William and Kate will not only boost tourism and sales of commemorative china, but also wrest the national psyche from its collective funk? Hope springs eternal...

Gfk NOP's confidence index plummeted to -31 in April, well down on the -16 figure recorded this time last year. In fact, it has only ever fallen below -30 twice: in the early 1990s, and in mid-2008. All five of its measures of confidence - about the general economic situation, about expectations for the coming year, about whether it's a good time to make a major purchase, and about people's own financial situation, both during the last year and over the next 12 months - fell sharply. So all in all, people are pretty gloomy. 'Bad news for the government and bad news for the economy,' was GfK MD Nick Moon's equally gloomy assessment.

Not everyone is as downbeat. Ad giant WPP, which reported its latest results today, said it was 'cautiously optimistic' about the coming year after a strong first quarter - and since it tends to be a decent bellwether for general confidence, perhaps that's a sign of better things to come. Whitbread certainly seems to think so: it said today that it's planning to double the size of its Costa coffee shop chain in the next five years - and anyone who thinks UK high streets are in desperate need of another 1,500+ coffee shops must be feeling unbelievably optimistic about the future.

The question now is whether the royal wedding will prove a help or a hindrance. Some argue that it could be an expensive drag on the economy (and not just because of the £10m price tag); for instance, the CBI suggested last year that it could wipe £6bn off GDP, given one day's loss of productivity plus overtime payments etc. And even if you accept that it will also provide a financial boost in some areas - increased tourism, more money spent in pubs and bars, extra sales of food, drink and incredibly tacky souvenirs etc - it's hard to imagine the corresponding benefit being anything like as big as £6bn.

But perhaps tomorrow's festivities could also have a less tangible benefit - in terms of the effect on the national mood, and the way the UK is perceived overseas. So even if you'd rather eat your own toenails than watch the royal wedding, perhaps it's time to put your scepticism to one side, get that Union Jack hat on, and make the most of an excuse for a party. It's for your own economic good...

Tags:
Economy Retail

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