American world star Taylor Swift's sold-out tour has reached Britain. Now, investment bank TD Securities warns in an analysis that the higher price pressure following the artist may threaten a British rate cut later in the summer, reports CNBC.
Swift's concerts in London in June and August will attract hundreds of thousands of fans. This means higher hotel prices, more restaurant visits, travel, and overall increased consumption – a Swift effect.
Most economists believe the central bank, the Bank of England, will cut interest rates in August from the current 5.25 – the highest level in 16 years. However, TD Securities estimates that the Swift concerts may give inflation a notable boost.
"An increase in hotel prices could be significant, temporarily adding as much as 30 points to service inflation," writes the bank's analyst, according to CNBC.
The entire British tour is expected to contribute £1 billion to the economy, equivalent to over 13 billion kronor, according to Barclays Bank.
Last week, the Swedish inflation figure for May was released, which was slightly higher than expected. Then, too, a Swift effect on inflation was discussed, contributing to closing the door on an interest rate cut from the central bank next week.
