Christopher Dembik, head of macro economics at investment platform Saxo, said the hospitality sector has thrived despite England being knocked out of the World Cup in the quarter finals.
However, he said there is no escape from the impending recession the UK now faces.
On which sectors of the economy have benefited most from the World Cup, Dembik said: “The hospitality sector is probably the main winner.”
Pre-pandemic profits
He continued: “Bars across Europe will have seen a temporary pick-up in recent weeks, for instance in the UK, we've seen reports of pre-pandemic profits being made by some pub chains, something I expect to continue through the Christmas period.
“However, I insist this won’t be enough to save many small businesses in this sector which face double-digit inflation when we look at costs.
“I believe that the World Cup could, at best, limit and postpone the wave of bankruptcies in SMEs (small to medium-sized enterprises). Their main issue is not to earn more money but to save money and lower costs such as energy, wages, etc.”
Downward dynamics
Dembik refuted the possibility of increased consumer spending being enough to save economies from weakening during the winter period.
He said: “Given the scale of the recession in the United Kingdom and in many other European countries (think Germany), this is unlikely that a single sporting event could save the economy.
“The World Cup will bring support to the hospitality sector, perhaps to transport. But overall, the downward dynamics of the economy (inflation for a prolonged period of time, drop in retail sales, fear of unemployment, etc) will have a much more powerful effect on the activity. In my view, the World Cup will probably have a net negative impact on the UK economy.”
