Latest drag on the UK economy
An extra day off on May 8 would help trigger a 0.74% contraction in May’s GDP and could lead the economy to a moderate contraction in the second quarter.
This will be the second year that royal events have influenced the increase, but according to the analysis, the influence of these events is decreasing.
The UK economy under Charles got off to a more solid start than economists had thought. Many have scaled back their forecasts for a recession this year, even as inflation remains double-digit. Corona’s delay in second-quarter growth is expected to mask the acceleration in the economy’s momentum, which the survey results show.
Deutsche Bank’s UK economist said the extra holiday would shave 0.53% off GDP in May, helping output fall in the second quarter.
The strengthening of tourism partly offsets the pressure of closed businesses. According to the Center for Economics and Business Research, the extra tourism would give a £337m boost to the economy.
The extra bank holidays due to royal events have a smaller effect on the economy than in the past. A rapid recovery within a month usually follows a drop in output.
Monthly GDP fell by 2.22% in June 2022, the golden jubilee of Queen Elizabeth II’s 50 years on the throne. In June 2012, coinciding with the Diamond Jubilee, output retreated by 1.42%. There were more modest drops of 0.74% for the platinum jubilee in June 2022 and 0.72% for funerals.
The closure of high street retail has little effect. The impact of production has also decreased, which may be related to difficulties in operating factories.
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