England glory in World Cup is not guaranteed winner on UK's economic front, warns expert
England is unlikely to score a major economic goal from its progress in the World Cup - despite some short-term increases in consumer spending, a senior economist has said.
Bank of England Governor Mark Carney has said the progress of Gareth Southgate's side through the tournament - they face Croatia in the semi-finals tomorrow night - has been "an unadulterated absolute good" for the economy.
And research by Barclaycard has said that consumer spending in pubs jumped by 33% on the day of the first England match on June 18, compared with the same day a week earlier.
However, Esmond Birnie, senior economist at the Ulster University Economic Policy Centre, said history suggests the impact on the UK economy would not be significant.
England is the only UK nation competing in the tournament - with Northern Ireland, Scotland and Wales all failing to qualify - but accounts for 86% of gross value added, Mr Birnie said.
In the immediate term, he said there could be some loss of productivity as workers may opt for watching the matches which take place during working hours instead of continuing with their work.
However, there could be a boost from the feel-good factor of watching the team do well.
"There is the long-term possibility that in the warm glow of any further World Cup wins, work effort and productivity rise," he said. "One very interesting economic theory is about how English progress in the World Cup could even lead to increased investment (and hence drive future growth).
"The 1930s economist John Maynard Keynes argued a lot of investment was determined by emotions and gut instincts - confidence about the future. The suggestion might be that footballing victories could fuel 'animal spirits' in England and increase a hitherto very low UK investment rate.
"Well, maybe, though it is pretty clear UK industrial investment has been relatively low for a very long time and there must be a range of factors which explain this."
But Mr Birnie said history called for caution on the benefits of World Cup success to the economy.
"The last time England reached the semis was 1990 and in that year, the economy grew by only 0.7%," he said.
"England may have beaten Germany in 1966, but that did not stop German economic productivity subsequently surpassing UK levels. In 1966, the UK economy grew by 1.9%.
"Admittedly, that may look good by the standards of what might be achieved this year, but it was a fairly low growth rate compared to most of the 1950s and 1960s."