A week in and expectations of a needed fillip to economic growth have rapidly been downgraded. Inevitably there are plenty of overseas tourists in London, but again the capital always has tourists in this mass at this time of year. It could be argued that net tourism would be down because of the stories regarding our gridlock and deceptive salesmen if it wasnt for Shauna Mullin and Zara Dampney representing team GB in the womens beach volley ball. The statistics of only half full hotels suggest that this may actually be the case.
Another additional reason why there may be little impact and no proper Olympic boost could be down to the reason that local Britons appear to be staying away from the most recognised event in the world. Some employees have been told to work at home through the duration of the Games. Furthermore, shopping trips to central London appear to have been put on hold, contributing to the stories of empty shops, while wet weather has led to a last-minute increase in sales of foreign holidays.
All this however is based on anecdotal evidence. Hard evidence of the Olympic effect is thin on the ground, although it is recognised that Olympic ticket sales will provide a minor injection to the gross domestic product (GDP) equivalent to 0.1% of the national output. Fans have been splashing out for the Olympic tickets over the build-up to the London Olympic Games. Another positive view seen in the growth from July-September period will come from the repercussions of the double bank holiday for the Queens Diamond Jubilee. This lost an apparent 0.4% off growth the second economic quarter of the year, but however assuming that the loss is all scraped back, it should add up to the expected amount of growth for the third quarter of the economic season. So hopefully (even without the Olympic Games) growth output should upsurge by 0.5% between the second and third quarters.
David Cameron and George Osborne were overly optimistic. As in reality, for the economy to register even zero growth in 2012 as a whole, output needs to rise 1% this quarter and persist at that level in the final quarter. But however, with central London looking like a ghost town, that task looks an uphill challenge getting steeper day by day.