Taylor Swift’s London Eras Tour poses potential delay for Bank of England rate cut: CNBC

Taylor Swift's Eras Tour in the U.K. is boosting consumer spending, potentially delaying a Bank of England interest rate cut. Analysts predict a cut in August, but Swift's impact on inflation data could affect the timeline.

Livemint
First Published15 Jun 2024, 08:40 AM IST
Taylor Swift's Eras Tour in the U.K. is boosting consumer spending, potentially delaying a Bank of England interest rate cut. Analysts predict a cut in August, but Swift's impact on inflation data could affect the timeline.
Taylor Swift’s Eras Tour in the U.K. is boosting consumer spending, potentially delaying a Bank of England interest rate cut. Analysts predict a cut in August, but Swift’s impact on inflation data could affect the timeline.

Taylor Swift’s record-breaking Eras Tour is significantly boosting consumer spending as it reaches the U.K., potentially complicating the Bank of England's efforts to control inflation, CNBC reported.

TD Securities told CNBC that the influx of hundreds of thousands of fans to London in August for Swift’s final U.K. performances could stimulate the economy enough to delay a potential interest rate cut in September.

“We still anticipate a BoE cut in August, but the inflation data for that month might keep the MPC (Monetary Policy Committee) on hold in September,” the bank’s macro strategist, Lucas Krishan, and its head of global macro strategy, James Rossiter, wrote in a note Friday.

Read here: RBI relocates 100 tonnes of gold from UK to its Indian vaults: Report

The Bank of England is anticipated to start lowering its bank rate from the 16-year high of 5.25 percent soon. Among 65 economists surveyed by Reuters, all but two expect a rate cut in August, while financial markets are betting on a September cut.

However, analysts noted that one of Swift's August tour dates coinciding with a key inflation index day could skew the data, potentially causing the bank to reconsider its timeline.

"A surge in hotel prices could be significant, potentially adding up to 30 basis points to services inflation and 15 basis points to headline inflation," Krishan and Rossiter told CNBC.

Read here: BoE holds key interest rates at 16-year high-mark, moves closer to cuts

When contacted by CNBC, the Bank of England did not specifically address these comments but stated, "The MPC considers a wide range of economic indicators when making decisions on interest rates."

The CNBC report also highlighted the well-documented economic impact of Swift’s sold-out tour, with terms like “Swiftflation” and “Swiftonomics” emerging to describe the surge in spending on services such as hotels, flights, and restaurants around her performances.

In Edinburgh, Scotland, where the Grammy winner kicked off her U.K. leg earlier this month, local authorities estimated that the concerts and related spending contributed approximately £77 million ($98 million) to the local economy. Additionally, Barclays Bank projected that the entire U.K. tour could inject an estimated 1 billion euros into the British economy.

Read here: UK vs US: Which superpower will first cut rates in 2024? Inflation answers…

TD Securities further informed CNBC that the recent data indicated a significant increase in hotel prices in Edinburgh during Taylor Swift's visit last weekend, which was described as "larger than usual." In contrast, the upward pressure on prices was less notable in Liverpool, where Swift concluded her performances in northwest England on Thursday.

Swift is scheduled to perform next in Cardiff, Wales, and later in London this month. Analysts noted that Swift's Cardiff concert might coincide with a June inflation index day, but they anticipate minimal impact due to the city's smaller size.

The Bank of England is set to convene next Thursday to announce its latest interest rate decision and provide insights into future inflation trends.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess

News in Numbers

Numbers that help you understand news better
₹68,885 Cr

3.15L

48%

₹6.7 T

$240.5 M

$459 M

$3 B

₹588.25 Cr

₹20,000 Cr

7.93 Cr

₹8,943 Cr

10%

20 Yrs

First Published:15 Jun 2024, 08:40 AM IST
HomeMarketsStock MarketsTaylor Swift’s London Eras Tour poses potential delay for Bank of England rate cut: CNBC

Most Active Stocks

Bharat Electronics

313.50
03:59 PM | 18 JUL 2024
-12.85 (-3.94%)

Oil & Natural Gas Corporation

331.20
03:59 PM | 18 JUL 2024
8.8 (2.73%)

Zee Entertainment Enterprises

142.45
03:59 PM | 18 JUL 2024
-13 (-8.36%)

Tata Steel

166.35
03:56 PM | 18 JUL 2024
-0.7 (-0.42%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

India Cements

344.75
03:54 PM | 18 JUL 2024
21.7 (6.72%)

IDBI Bank

92.19
03:59 PM | 18 JUL 2024
4.27 (4.86%)

Endurance Technologies

2,679.00
03:29 PM | 18 JUL 2024
102.4 (3.97%)

Gillette India

8,002.75
03:29 PM | 18 JUL 2024
275 (3.56%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    75,099.00-147.00
    Chennai
    74,659.00-440.00
    Delhi
    74,512.00-294.00
    Kolkata
    75,539.0073.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.76/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanMint Shorts