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The Olympic Games, boosting or busting?

Move over Harry Potter, the nation has a host of new hero’s. And some very sparkly post boxes.

Team GB are doing the nation proud. Thanks to their sweat, blood, tears and triumphs we’ve got 18 gold’s, 11 silvers and 11 bronzes in the bag – and a few broken records to boot. With more gold medals within GB reach we’re well on our way to trumping our Beijing total and if the cycling, triathlon and dressage go well, we might even be set to have our most successful Olympic Games in a century.

The Olympics, and particularly the British successes, are inspiring the country and topping up 2012’s surge of national pride. There are strong hopes regarding the effect the games will have on the up-and-coming generation, and during an interview with the telegraph Chinese Ambassador Liu Xiaoming commented that Britain can expect the long term benefits Beijing experienced. Liu Xiaoming was quoted as saying: ‘I believe London Olympic Games will also have a positive impact on Britain in many fields. Apart from the visible legacy, such as improved infrastructure and impressive sports venues, it will play a huge role in boosting the British economy and sports industry. It will also promote to the world Britain’s diversified culture and increase mutual understanding between British people and those of all countries around the world.’

This certainly seems positive, but conflicting reports have emerged regarding the economic impact of the Olympics on Britain.

Information relayed by the British Retail Consortium indicates that the onset of the Olympics caused a boost in food and drink sales, which lifted UK retail sales as a whole. The BRC assessed the sales of stores which had been open for at least 12 months and compared with the previous year sales rose by 0.1 per cent. If stores open less than twelve months were also taken into account then the value of retail sales was 2 per cent higher than in July 2011.

However, BRC Director General Stephen Robertson has shown caution in his assessment of the situation: ‘There was a boost for food retailers toward the end of the month as the sunshine came out and shoppers started getting in party food and drink ahead of the Olympics, but it wasn’t a significant help. With only the opening couple of days of the Olympic Games covered by these statistics we’ll have to wait a while to assess the overall impact on retail sales.’ The BRC also added that big-ticket item sales continued to be poor.

Other reports released today have asserted that the London tourist trade has been damaged rather than boosted by the Olympics. Following repeated warnings regarding the London transport system, and its possible inability to cope with such an added influx of users, usual non-Olympic seasonal visitors have all but disappeared. They are absent not only from the tube lines but the shopping districts, hotels and key attractions. Restaurateurs, cafe owners and hospitality workers have voiced their displeasure over London’s ‘quiet streets’ while some of the main London tourist attractions have seen visitor numbers drop by 30 to 35 per cent.

This situation is not totally unexpected. Back in March the government’s budget watchdog OBR made note of the fact that many visitors might delay or cancel trips to the capital in order to avoid the crush of crowds. The OBR further stated that: ‘Given the uncertainties and the relatively small size of any possible effects, we assume that, apart from the ticket sales effects, the Olympics will not have a material effect on the quarterly path of GDP.’

It’s not all gloomy though, despite shops at a distance from the Olympic Park seeing either no increase or a drop in sales, those within its vicinity (such as the Westfield Shopping Centre) have been manically busy, with sales even doubling in some cases.

It seems that how the Olympics will really affect the British economy won’t be known until the weeks and months following the closing ceremony. But, for now, the Games are certainly giving a big boost to morale if nothing else.

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