By Mark Richards

On Wednesday England play Croatia in the semi-final of the World Cup. Will the team’s success boost the national economy? Or will the effect vanish with the fans’ hangovers? And now much is a successful football team really worth to a town?

So, after 28 years, countless disappointments and a generation conditioned to expect England to go out on penalties, we are in the semi-finals of the World Cup. On Wednesday night England will play Croatia, with the winners facing France or Belgium in next Sunday’s final.

There is a massive ‘feelgood factor’ around the country. The sun is shining – and football really could be ‘coming home.’

And yes – the tills are ringing in the shops. But is it just a short-term ‘let’s get the beers in and watch the match?’ Or could England’s success translate into something much more tangible and long-term for the UK economy? Could Gareth Southgate – or Lord Southgate of Penaltyspot as he will surely become – put a smile not just on the faces of football fans, but of the Chancellor of the Exchequer as well?

The conventional wisdom says ‘yes…’

Alistair Wilson, a savings expert at Zurich UK, said,

“A Mexican wave of optimism (and you thought Mark Lawrenson talked in clichés) is sweeping the nation, driving increased spending on everything from replica football kits to alcohol to wide screen TVs.”

He suggested that a win for England could also be good news for hard-pressed savers. He said

“The feelgood factor from the World Cup could help to push savings rates up.”

The UK economy was predicted to see a £1.33bn boost from the World Cup, according to figures from the Centre for Retail Research, with that figure expected to rise to £2.72b if the Three Lions beat the Blazers and make it to the final. (Yes, the traditional nickname of the Croatian national side is Vatreni – the Blazers.)

And there is plenty of anecdotal evidence to say that a town’s football team doing well – winning promotion or a giant-killing win in the FA Cup – boosts the local mood and boosts productivity on the following Monday morning. Would that translate into a national mood? Talking to my two eldest children – who have watched all the England wins in public places, yes, it does translate into a feelgood factor, at least in Leeds, where they both work.

But around 80% of England fans are expected to watch the match at home, with the spend on food and drink predicted to reach £1.2bn. Even the sober-suited denizens of the Bank of England are supporting Harry Kane and co. with Governor Mark Carney saying that success would give an “unadulterated boost” to the UK economy. And there have certainly been some mild scenes of celebration

…But the cynics say no

Surely you cannot base a national economy on sales of beer, crisps and St George’s flags? No, of course, you cannot – and it is easy to be cynical. An England World cup win will see a rise in interest rates paid to savers? I’ll have a pint of whatever Mr Wilson has been drinking…

Football’s Coming Home – but will it Boost the Economy?

And, surely, for every person who bounces into work buoyed by an England victory, there will be another who has stayed at home with “a touch of flu, boss” – a.k.a. a savage hangover. And that people who got seriously drunk on Wednesday night are not at their most productive on Thursday morning – and even if they are in the office, they are not working, but discussing whether Raheem Sterling is really worth his place in the team.

Yes, it will be great if England wins the World Cup – but a week later sales of beer and crisps will have returned to normal, and the flags will be put away until Euro2020. Retail may well have received a short-term boost in July, but the figures will correct themselves in August.

Perhaps we need some real evidence?

England may not have been 5,000/1 to lift the World Cup – as Leicester City were before the 2015/16 Premier League season, but the generation brought up on missed penalties and going out to Germany was certainly not optimistic before the tournament kicked off.

For that Premier League season, Leicester were rank outsiders – they had only just escaped relegation in the previous season and many people had them as favourites for the drop. Instead, the team defied all expectations – and landed a few healthy bets for their fans – by winning the title by ten points from Arsenal.

What impact did that have on the city of Leicester – apart from on local bookies’ profits? A significant one…

Accountants and management consultants EY undertook a survey, with chief economist Mark Gregory commenting,

“The sporting and commercial success of the club in 2015/16 and the projected growth in 2016/17 has allowed it to further embed itself as a key participant in the local economy. As the club grows it attracts more fans, employs more people, engages more local suppliers, invests more in community facilities, attracts more visitors and increases the region’s global profile.”

According to the study by EY, Leicester’s title-winning season contributed significantly to the local economy.

Total economic output was measured as £193m, with £78m generated in tax and up to 2,500 jobs supported – with £18m going into the local supply chain. EY estimate that Leicester’s unexpected triumph attracted 120,000 extra visitors to the town, who spent an estimated £6.6m. The team’s subsequent qualification for the Champions League was expected to add another £2m to the tourism spend.

…Which raises an interesting question. Is the economy of Manchester boosted to a similar amount if City or United win the Premier League? I doubt it – I have no evidence at all but I strongly suspect that it was the unexpected nature of Leicester’s success that suddenly put the town on the map. Perhaps another regional economy is due a boost – economically, it might be good news if Southampton, Burnley or Wolverhampton Wanderers win this season’s, Premier League…