Patrick Foley, Chief Economist at Lloyds Banking Group, recently wrote in The Daily Telegraph (UK) that the Olympic Games in London will boost the UK economy by £16.5bn. He sees construction, tourism, jobs and the ‘happiness’ effect will leave a lasting legacy.
The development of a neglected area of East London will have a huge impact with higher living standards and business opportunities. There are also huge tourism benefits that follow from the end of the games and this has been prevalent with most host cities in the past. The Games could create and support a total of 354,000 years of employment across the UK. Jobs that are directly associated with the Games themselves and through developing skills of the working population that help raise their prospects of jobs in the future.
There is also the ‘happiness effect’ with hosting one of the biggest sporting events which is likely to inspire consumer spending. A number of economists have looked at the economic impact of hosting significant sporting events and are in broad agreement that aggregate demand does increase. In 1996 when England hosted the European Football Championship it was estimated that the feel-good factor was equivalent to £165 gift for each of the UK population – it can be expected the London Olympics will be significantly higher than this figure.