Queen’s Celebrations Could Hurt The UK Economy, Says King
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The U.K.’s national economic output could shrink between April to June this year, said Bank of England governor Sir Mervyn King, as citizens prepare to indulge in an additional holiday in order to celebrate Queen Elizabeth II’s Diamond Jubilee.
The U.K.’s national economic output could shrink between April to June this year, said Bank of England governor Sir Mervyn King, as citizens prepare to indulge in an additional holiday in order to celebrate Queen Elizabeth II’s Diamond Jubilee.
Speaking at an appearance before the House of Lord’s Economic Affairs Committee on Tuesday, King predicted that the U.K.’s economy could potentially see a similar trend as during last year’s royal wedding between Prince William and Kate Middleton, where economic data actually shrank by 0.2 percent due to the additional holiday afforded by the nuptial celebrations.
“We do expect quite possibly a fall in output in the second quarter, followed by a rise in the third quarter, as we will lose an extra day’s work – it doesn’t necessarily follow that we will lose that whole day’s output – because of the national bank holiday,” said King, as quoted by the Guardian.
[quote]”Last year we saw that pattern again [due to the royal wedding]. We would expect that to happen again,” added King.[/quote]Related: The Most Expensive Wedding Ever?
Related: The Economics of the Royal Wedding
This year will mark the 60th anniversary of Queen Elizabeth II ascension into the crown. The traditional spring bank holiday in the U.K., normally held in May, has already been moved back to June 4 (Monday), with the following day marked as another bank holiday in order to commemorate the Queen.
Still, the governor does not expect the U.K. to enter into recession, with the Bank of England predicting that the economy will grow by 1 percent this year.
“I would like to think that we can go back to the sort of economic growth rates we saw in the past. Those people who are struggling on low incomes would feel it rather a policy of despair to say that we can’t achieve growth.”
[quote]”I see no economic reason why we cannot, in the long run, go back to the sort of growth rates we had before. Once we come through this crisis we will able to get back to that sort of period again, but it will take some time,” he said.[/quote]Related: UK Economy
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Last month, King predicted a “zig zag” of positive and negative growth for the U.K. economy this year as economic uncertainty within Europe continues to plague the nation, while events such as the Olympics may prove to be a boost to the economy.
Ben Broadbent, a former Goldman Sachs economist who sits on the Bank of England’s interest rate setting committee with the Governor, told the Daily Mail that the extra holiday for the Queen’s celebrations would almost certainly prove to be a hindrance for businesses.
[quote]“It is 5 percent of working time… Maybe a little less, but it is quite a lot,” he said.[/quote]
