Taylor Swift has ‘put pressure’ on inflation in the UK due to the sky-high ticket prices for her record-breaking Era tour.
The pop star’s Eras tour is set to return to Wembley Stadium for five nights in August, having hit venues in Edinburgh, Liverpool, Cardiff and London in June.
Prince William and his two children, Prince George and Princess Charlotte, were one of a number of famous faces that flocked to the gigs – which saw 640,000 tickets sold.
But Swift’s arena tour could have had a heavy influence on UK inflation in June, leaving the Bank of England facing a dilemma this summer.
Services inflation – which looks only at service-related categories such as hospitality, culture and housing – could drop to 5.6 per cent from 5.7 per cent in May as it continues its ‘slow descent’ toward target levels, a senior economist told the Telegraph.
Taylor Swift performs during her Eras Tour at Wembley Stadium in London on June 22
The interest rate is shown since 2018 along with a forecast from Capital Economics which thinks the first cut will come in August, and it could fall to 3 per cent by the end of 2025
But this drop could be affected by one-off pressures including live music price rises, driven by Swift’s tour.
Predictions by Sanjay Raja, of Deutsche Bank, show that live music inflation could nearly double to around 10 per cent in June from 5.7 per cent in May.
According to research carried out by Barclays last month, fans will each spend nearly £850 attending one of her 15 concerts in the UK this summer.
The Bank of England has stressed that services inflation and rising wages are said to be the two main factors impacting wider inflation.
Inflation returned to the Bank’s 2 per cent target in May and next week fresh economic data will shed more light on the country’s financial situation.
It followed three years of above-target inflation, thanks largely to food prices rising at a much slower rate than before, due largely to food prices rising at a much slower rate than before.
In June, economists are expecting the rate of consumer prices index inflation to have stayed at or close to 2 per cent.
Many in the industry will also have their eyes on the new labour market data, which is released on Thursday, to see how fast averages wages are rising in the UK, especially after the national minimum wage rose in April.
The Bank’s Governor Andrew Bailey said it decided to hold interest rates at 5.25 per cent ‘for now’ last month because it needed ‘to be sure that inflation will stay low’.
This comes after analysts claimed that the Bank of England could delay cutting interest rates until September as the UK economy is boosted by Taylor Swift‘s Eras Tour.
The pop star has already played sell-out shows in Edinburgh, Liverpool and Cardiff as well as three in London – and will head back to Wembley this August for five more.
Swift’s fans, known as ‘Swifties’, are expected to boost the London economy alone by £300million as the capital hosts more Eras Tour shows than any other city in the world, with nearly 640,000 people expected to attend across the eight dates.
Taylor Swift performs during her Eras Tour at Wembley Stadium in London on June 23
Fans walk towards Wembley Stadium on June 21 ahead of Taylor Swift’s first London concert
Taylor Swift as she performed for the first night at Wembley of her total of eight performances at the London venue
The Bank’s Monetary Policy Committee (MPC) voted last Thursday to keep interest rates unchanged at a 16-year high of 5.25 per cent for the seventh time in a row.
Many analysts expect the next cut to be in August, but experts at London investment bank TD Securities believe the economic boost Swift’s concerts are giving Britain is so significant that it could be enough to defer the reduction until September.
The bank’s macro strategist Lucas Krishan and its head of global macro strategy James Rossiter made the claim in a note on June 14, reported CNBC.
They said: ‘We still anticipate a BoE cut in August, but the inflation data for that month might keep the MPC on hold in September.’
The analysts pointed out that a potential clash with one of Swift’s Wembley concerts between August 15 and 20 and a key inflation index day could skew the data and influence the MPC’s decision.
Mr Krishan and Mr Rossiter added that a ‘surge in hotel prices then could be material’, temporarily adding as much as 30 basis points to services inflation and 15 basis points on headline inflation.
They also said that while her Cardiff date coincided with this month’s inflation index day, the impact would have been lesser given the smaller size of the city to London and just one date there.
It comes after a Barclays ‘Swiftonomics’ report issued last month found Swift’s tour is expected to provide a £997million boost to the UK economy thanks to Taylor’s 15 tour dates this summer..
Some 1.2million fans are estimated to be spending an average of £848 on tickets, travel, accommodation, outfits and other costs to see the star at one of her 15 UK tour dates – more than 12 times the average cost of a night out.