Even without the Olympics, we would expect a positive GDP number for the third quarter, because the second quarter was impacted by having one fewer day of output due to the Queen’s Jubilee. But is the Olympic effect enough to turn GDP positive for the whole year? This will depend on the feel-good effect that arises after the games are over. Econometricians are not expecting the impact of extra games fans spending cash on burgers and beer to be significant. The key is the knock-on effect due to a rise in consumer confidence, which then leads to increased expenditure ranging from new gym memberships to booking next year’s holiday. The feel-good level is difficult to measure, let alone forecast.
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