He’s less than 24 hours old, and he doesn’t even have a name, but UK’s royal baby is already doing his bit to boost the country’s struggling economy.
It’s not just the British bookies who should be rubbing their hands with glee at the much-awaited arrival of the Duke and Duchess of Cambridge’s son; the British public are due an economic as a well as a sentimental boost courtesy of the yet-to-be-named infant, who is third in line to the throne.
A study by Brand Finance, a brand and intangible asset valuation agency, has the bonniest prediction: Britain’s economy will get a £521million boost in 2013 due to the arrival of the royal baby. While that is chump change for a $2.54 trillion economy, it does add to rising business confidence and growth in the service sector. Earlier this month, the International Monetary Fund raised its economic growth forecast for this year to 0.9% from 0.7% previously.
If the past 24 hours of breathless news coverage haven’t emphasized the point enough, the British public is buoyant over the birth of a new heir. And if the 2011 wedding of Prince William and Kate Middleton, and the Queen’s diamond jubilee last year, have taught royalists one thing, it’s that a big royal occasion means a boost for the nation’s retailers.
Less optimistically, the Centre for Retail Research predicted a £240 million gain for the British economy in June.
The royalty is itself not far behind in cashing in; according to a report in The Telegraph, Prince Charles is offering baby shoes through his estate Highgrove, while the baby’s maternal grandparents have added a range of baby goods to their party goods business, Party Pieces.
Brand Finance’s calculations are predicated on a massive boost in consumer sentiment for “Brand Britain”. This will be responsible for four-tenths of the £521 million output surge, the agency said.
Of the total, a £56 million gain is expected from sales of souvenirs while the royal heir’s 63 million subjects are expected to blow up £87 million in food and drink celebrating the baby’s arrival. Brand Finance also expects a £33 million boost from what it calls “the pushchair effect” of sales of motherhood-related products. Indeed, the stock of Mothercare Plc. has jumped by half since December, when the duchess announced her pregnancy, compared with a 13% gain in the FTSE100.
While the question whether the royal family is an overall boost or drain on the average citizen is moot in the UK, Brand Finance valued its overall contribution to the economy this year at £1.5 billion, with the Queen’s jubilee celebrated in 2012 adding £930 million in terms of improved consumer sentiment and tourism revenue, according to Brand Finance.
Aside from that, retailers and fashion designers have analysed what they describe as “the Kate effect”—the boost given to sales of items worn or mentioned by the new mother.
The BBC will also be looking to milk the current appetite for royal-related coverage and has announced that BBC World News will air a documentary titled “Born to be King” this evening, looking back on the history of Royal births.