Taylor Swift performs on stage during the “Taylor Swift | The Eras Tour” held at Wembley Stadium in London, England on August 15, 2024.
Gareth Cattermole/tas24 | Getty Images Entertainment | Getty Images
LONDON – Taylor Swift’s record-breaking Eras tour may lead to a surge in restaurant and hotel bookings in the UK but is unlikely to have a major impact on the Bank of England’s interest rate cut policy, an analyst told CNBC.
The pop star returns to the UK this week for five more concerts, doubling her total of eight shows at Wembley Stadium this summer and breaking the record for any solo artist to perform at the stadium.
barclays bank Predictive In May, the 1.2 million ticket holders spent an average of £848 ($1,105) each, meaning the tour could provide a £997 million boost to the UK economy.
James Rossiter, global head of macro strategy at TD Securities, said the Eras Tour concerts created “a really significant economic multiplier effect.”
“This time, we are seeing a more lasting impact on restaurant bookings,” Rossiter told Squawk Box Europe on Wednesday.
“For example, we look at (online restaurant reservation service) OpenTable data, and we do see a spike in June around her concert here, and we actually see another big increase on the weekends.”
However, Rossiter said the concerts would have less of an impact on air tickets and hotels, explaining that large cities like London typically see a boost in tourism during the summer.
Rossiter said TD Securities’ current base case is that the Bank of England will cut interest rates by 25 basis points every quarter. Earlier this month, the central bank cut interest rates for the first time in more than four years, taking the key interest rate to 5%.
TD Securities previously said the Eras Tour could be enough to delay a potential rate cut in September – such is the potential impact it could have on the country’s inflation data.
Rossiter said on Wednesday he expected the central bank to act “cautiously” in implementing rate cuts.
“The tone of their August meeting was quite cautious. They were certainly nervous about some of the underlying data. I mean, you look at wage growth over 5%, you look at where service sector inflation is now, core inflation is still at 3.3% , they can’t easily get back into neutral yet,” he said.
Rossiter said major events such as a coronation or a Taylor Swift concert complicate the Bank of England’s role because it adds “distortions” to the data the central bank analyzes when making monetary policy decisions.
But he added that the Eras Tour would generally have no further impact on future inflation.
“I think (the Bank of England) is going to look at distortions like the impact of Taylor Swift, look more at wages and some of the other elements of inflation, and really just proceed very, very cautiously,” he said.
‘Significant impact’ on hospitality industry
UK Hospitality chief executive Kate Nicholls told European Street Signs on Wednesday that the tour had had a “significant impact” and had been welcomed by the hospitality industry and summer sports events.
“I think Taylor’s multi-generational audience means people are coming for longer,” Nichols said.
“They book in advance, go out to eat and drink and socialize around it, which is hugely popular with the restaurants and bars surrounding the concert venue.”
The CEO added that these shows “hotel occupancy was up approximately 96%, which is much higher than on other similar days.”
“We’re seeing a huge influx of foreign visitors and we know that music tourism, sports tourism and entertainment events are a real boost and a significant boost to the UK economy. It’s our second largest source of services export revenue and it’s our fastest growing area.
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