Comment: Our economy needs the Olympic high to continue
AS THE Games conclude and the Spice Girls wrap up two weeks of national euphoria, questions are being asked about the Olympic legacy. Could the uplift in spirits actually help with the economic recovery?
Sir Mervyn King, governor of the Bank of England, last week said that when it comes to total commitment in achieving its goal, Britain should look to Team GB for inspiration.
It may have said something about the governor running out of ideas, but at least it showed his heart was in the right place, and there was immediate evidence of an Olympic dividend with new figures showing consumers flocking to the shops to buy sporting equipment.
Footfall rose during the second week of the Games as the rush to buy bicycles, running shoes, rowing machines and even Andy Murray-inspired wristbands was given added impetus by the growing tally of gold medals. Towards the end of the week even the sun came out to add some shine to the feel-good factor.
Evans Cycles, Greaves Sports and John Lewis were among those reporting a huge boost in sales that are expected to feed through to a badly needed improvement in the sector’s fortunes and in the wider economy.
There are hopes that the two-week binge will cause a lasting shift in consumer confidence. Sales of all things British have enjoyed a particular boost, from homemade beer to celebration cakes. There is also evidence that the benefits have been shared across the country.
The big worry is that the mood will revert to pre-Games gloom as the Olympic circus packs up its tent and moves on. Mervyn King may have called for an Olympic effort to revive the economy, but it was a passing mention in a generally grim presentation on prospects that focused on expectations of zero growth.
More promising is that inflation figures this week should be down once again, to around 2.3 per cent and on target to hit 2 per cent.
That should encourage policymakers to inject some stimulants into the economy to help build on the nascent, if fragile, pick-up in confidence.
Can First really be the worst?
It looks as if FirstGroup will win a 14-year franchise to run trains on the Glasgow to London mainline, bringing an end to the Virgin-Stagecoach partnership and raising questions about the wisdom of the decision.
Aberdeen-based FirstGroup has been frontrunner for some weeks, but looks to have secured the prize merely on price. There are fears among rail workers that they will pay for the deal through job losses, while customer groups claim there will be cutbacks in the level of service.
There are also concerns over FirstGroup’s suitability, given its record in the south-west where its poor performance earned it the moniker Worst Great Western. It decided to hand back the London-Cornwall licence early to avoid £800 million of payments to the government.
But Virgin is also tainted by criticism. In spite of promises to revolutionise rail transport, there were complaints, at least in the early years, of cramped compartments, mediocre food and poor punctuality.
Stagecoach might benefit by handing over the franchise to FirstGroup and picking up a less challenging route. But there are clear losers, whichever way the decision goes. As a Virgin spokesman said, there is no silver medal in this particular contest.
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