Taylor Swift’s Eras Tour May Force Bank of England To Delay Interest Rate Cut

‘Swiftonomics’ is likely to boost the United Kingdom’s economy and impact inflation indicators.

AP/Natacha Pisarenko
Taylor Swift performs at the Monumental stadium during her Eras Tour concert in Buenos Aires, Argentina, Thursday, Nov. 9, 2023. AP/Natacha Pisarenko

Could Taylor Swift’s Eras Tour prompt the Bank of England to delay an interest rate cut? 

“Look What You Made Me Do” might just be the message to come out of the Bank of England as the predicted economic boost from Ms. Swift’s Eras Tour may lead the central bank to forgo an interest rate cut until September, according to two high-ranking TD Securities strategists. 

With the United Kingdom’s interest rates currently sitting at a 16-year high of 5.25 percent, the public has been itching for a long-awaited reduction. Following the Bank of England’s decision to keep rates steady in May, most economists have placed their bets on a cut announcement following August’s committee meeting. 

However, with the Eras Tour set to take place at London right around the time of the release of a key inflation report, the economic data may come in hotter than expected and prompt the central bank to rethink its interest rate timeline, TD Securities’ macro strategist, Lucas Krishan, and head of global macro strategy, James Rossiter, note.

“A surge in hotel prices could be significant, potentially adding up to 30 basis points to services inflation and 15 basis points to headline inflation,” Mr. Krishan and Mr. Rossiter told CNBC.

While the two officials “still anticipate” a rate cut in August, “the inflation data for that month might keep the MPC (Monetary Policy Committee) on hold in September,” they add. 

The unprecedented impact of Ms. Swift’s tour on local economies has prompted economists and Swifties alike to coin the term “Swiftonomics” to describe her economic influence. The moniker has already permeated the mainstream press and boasts its own Investopedia page

The 14-time Grammy winner has already started her U.K. tour with a bang, with three sold-out concerts at Edinburgh, Scotland, generating an estimated $98 million boost to the local economy. In an effort to capture maximal visitor spending, Edinburgh set up a “Taylored Taste Trail” to provide concert-goers with a guided tour of more than 40 local businesses that offered Taylor-Swift-themed goods. 

With roughly 73,000 audience members packed into Edinburgh’s Murrayfield Stadium, the show marked the most highly attended concert in Scottish history. The “earth shattering” concert lived up to the hype by quite literally triggering earthquake readings up to four miles from the venue, according to Scotland’s national earthquake monitoring agency. 

By the end of the U.K. portion of the tour — which will bring the pop star to Liverpool, Cardiff, Wales, and London — Barclays predicts that the pop star could be responsible for the flow of more than $1 billion to the British economy. 

The whopping sum, however, trails the economic impact of her North American tour, which is estimated to amount to a cool $5 billion, though the U.S. Travel Association suspects it may even exceed $10 billion.

Broken down, on average, each “Swiftie” — Both American and non-American — set themselves back $1,300 on booking travel, hotel stays, food, and merchandise during the North American tour. The per-person figure greatly exceeds that of a typical concert-goer and is actually more on par with the figure for a Super Bowl attendee. Though unlike the Superbowl, which happens once a year, the Eras tour took place in America 53 times over the past five months. 

While Ms. Swift has yet to impact the trajectory of American interest rates, “Swiftonomics” has captured the attention of the Federal Reserve. In its June 2023 Beige Book, the Fed noted that “May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city.”

Curiously, in spite of high inflation and economic uncertainty — both in the United Kingdom and America — Ms. Swift’s high-spending fans seem undeterred. Some economists have since suggested that the fan base’s spending habits represent a unique post-Covid economic trend: consumers are willing to splurge on what they missed during the pandemic. 

Thus, Ms. Swift’s fans — many of whom are Millennials and Gen Zs who generated historically high levels of savings during Covid — are more than happy to dole out four figures to see their favorite pop star perform live. 

Though they’ll have to secure a ticket before Ms. Swift officially ends the tour in December, a deadline she recently announced at a concert at Liverpool — her 100th performance of the tour. She has a little more than 50 shows to go, with remaining concerts spanning the U.K., Europe, Canada, and America. 

The New York Sun

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