Will the Olympic Games financially benefit all of UK?

A recent poll of economists suggests that the Olympics will bring no meaningful long-term benefit to Britain’s economy, but just a quick injection of cash.

Will the Olympics benefit all of the UK economically?A recent poll of economists suggests that the Olympics will bring no meaningful long-term benefit to Britain’s economy, but just a quick injection of cash.

23 out of 27 economists polled by news agency Reuters thought the UK’s first Olympics in 64 years would not provide a lasting economic windfall.

Prime Minister David Cameron last week suggested the Games would generate £13bn over four years, yet most economists from banks and research institutions think that claim is optimistic.

“The UK economy is maybe the seventh largest, and when you stage an Olympic Games in an economy like that, it’s very difficult to identify what the impact is”, said Stephen Lewis, chief economist at Monument Securities in London.

He argues that the Olympics may give smaller economies an appreciable boost, but as London is already one of the world’s top tourist destinations, lasting economic benefits would be insignificant.

“Where there have been long-term boosts to tourism, it’s generally been in cities that have previously not had as developed a tourist trade,” he added.

However, one way other cities will benefit is through the multiplier effect: the Olympics could generate economic benefits through infrastructure improvements and inward investment. For example, after London 2012, three 50m swimming pools and the water polo pools will be disassembled and rebuilt in other parts of the UK. All the sports equipment used will also be donated to UK sports clubs and charities.

Related post: Who are the likely winners of the Olympics legacy?

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