The Brief: Today marks the Queen’s state funeral and along with it comes economic consequences as offices and commercial establishments pay their respects by closing down today. As they put their operations on hold, the Bank of England (BOE) has also announced it will postpone its Monetary Policy Committee meeting to Thursday as we await how high the new interest rate hike will be.
Why It Matters: As previously discussed, tradition can be costly, but nobody skips it out of respect, especially for a royalty revered by her countrymen. UK gross domestic product (GDP) only recovered by 0.2%, after falling 0.6% in June, according to the Office for National Statistics. But today’s public holiday is most likely to mark a significant dent on GDP similar to the impact of the Queen’s Platinum Jubilee event. The effect will keep us closer to a technical recession.
Finanze® Foresights: Although the influx of tourists can somehow mitigate the effects of the temporary business shutdown today, we expect today’s event and the upcoming coronation of the new monarch to push earnings for the tourism and trade sector by around £40 to £65 million. But still, the second quarter economic contraction will likely continue as weaker activity will be observed when offices and manufacturing sites shut down today, not to mention the suspension of football events, golf tournaments and cricket test matches that generate millions of pounds in ticket sales and indirect revenues.
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