Would an England World Cup win boost British business? Here’s how French, German, Spanish and Italian economies responded to victory
- Data shows consumer confidence is boosted by home World Cup wins
- UK consumer confidence remained around historic lows in November
- But victory in Qatar could lift consumers and provide a boon to UK business
Struggling businesses reliant on the confidence of British consumers could be handed a December lifeline in the event of an English Fifa World Cup victory, new data suggests.
Such a boost would be welcome at a time when UK consumer confidence has been hammered in recent months by 41-year high inflation and a worsening economic outlook. Many consumer-facing businesses have been forced to rein in expectations as a result.
However, analysis of the last four World Cup-winning nations – France, Germany, Spain and Italy – suggests that any uplift on the back of a successful Three Lions campaign may be short-lived.
Business boost: Consumer-facing businesses will be hoping England captain Harry Kane can help inspire the Three Lions to victory
UK consumer confidence remained at around historic lows in November, registering a reading of -44 for the month on an index compiled by research group GfK.
Weak consumer confidence, and ultimately weaker spending, has had an impact on business confidence, which fell to its most pessimistic level in around 13 years in October, according to the latest Accenture/S&P Global UK Business Outlook Survey.
Client strategy director at GfK Joe Staton said: ‘External factors have changed little and, with UK inflation recently hitting a new high, more bad news is inevitable.
‘Household budgets remain shrouded in massive uncertainty with fresh jumps in food prices, energy still uncomfortably expensive, the prospect of new interest rate rises pressurising mortgage and rent payments, potential future hikes in council tax and squeezed real pay.
‘Good news remains in short supply as many people struggle to manage the purse-strings during this protracted and painful cost-of-living crisis.’
Consumer confidence in France fell back significantly in the months after the country’s World Cup win
England’s quarter final opponents France celebrate their 2018 victory in Russia
But, while England enter Saturday’s quarter final clash with champions France as underdogs, good news could be on the way in the event of a World Cup win.
Some businesses, such as pub groups, fast-food chains like Domino’s and even electronics suppliers, have already highlighted the importance of the World Cup to December trade.
Data compiled by wealth manager JM Finn shows the countries that won the last four World Cups enjoyed an uplift in consumer confidence during the month they lifted the trophy.
Italy’s victory shows the most noticeable uplift in consumer confidence compared the to the longer-term trend
Midfielder Daniele De Rossi embraces the trophy after Italy’s 2006 victory in Germany
France, Germany, Spain and Italy all saw above-trend growth in consumer confidence in the July of 2018, 2014, 2010 and 2006, respectively, according to FactSet data.
The growth in consumer confidence in all four examples also exceeds the average month-on-month change for the period of May to September, suggesting that when a nation lifts the World Cup trophy, there is a measurable boost.
Spanish consumer confidence was lifted into positive territory after the country’s 2010 World Cup win
Germany’s 2014 World Cup win provided relief against a backdrop of weakening consumer confidence
Jack Summers of JM Finn said: ‘Success at the World Cup for the home nation would not only delight fans but could offer a welcome short term economic boost.
‘If Harry Kane can fire his side to ultimate glory and lift the trophy, our analysis of previous winners shows that a World Cup victory improves respective consumer confidence in the near term.’
However, Summers adds: ‘Unfortunately this boost is fleeting and is typically eroded within a couple of months.’
Indeed, the data shows that in every example but Italy the nation’s consumer confidence actually receded into negative territory in the proceeding months.
And, with a difficult winter ahead for British consumers, it is probable that the UK would follow this trend.