Taylor Swift ‘put pressure on UK inflation’ in June
Taylor Swift may have put pressure on UK inflation thanks to her costly ticket prices.
The American singer’s Eras tour hit venues across the country in June including Edinburgh, Liverpool, Cardiff and London.
She is set to return to Wembley Stadium for another five nights in August.
Famous faces have flocked to the gigs, including Prince William and his two children, Prince George and Princess Charlotte, who posed for a selfie with Swift after one of her shows.
It may have caused a dilemma facing the Bank of England this summer, as economists predict her arena tour could have put pressure on UK inflation in June.
Pop stars Sir Paul McCartney, Bon Jovi and Ellie Goulding have also been seen among the crowd of tens of thousands in the UK, as well as Sir Keir Starmer during the election campaign.
Sanjay Raja, a senior economist for Deutsche Bank, said services inflation – an important gauge 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.
But he cautioned over one-off pressures including live music price rises, driven by Swift’s tour.
Mr Raja said he expects live music inflation to nearly double to around 10 per cent in June from 5.7 per cent in May.
Fans will each spend nearly £850 attending one of her 15 concerts in the UK this summer, according to research carried out by Barclays last month.
The Bank of England has repeatedly pointed to services inflation and rising wages as key indicators still putting pressure on wider inflation.
The comments come ahead of a busy week of economic data which will shed more light on the economy after inflation returned to the Bank’s 2 per cent target in May.
It marked a milestone after nearly three years of above-target inflation, thanks largely to food prices rising at a much slower rate than before.
Economists are widely expecting the rate of consumer prices index inflation to have stayed at, or close to, 2 per cent in June.
Meanwhile, economists will also be watching new labour market data released on Thursday to see how fast averages wages are rising in the UK, especially after the national minimum wage rose in April.
Andrew Bailey, the Bank’s Governor, stressed last month that it needs “to be sure that inflation will stay low”, which is why it decided to hold interest rates at 5.25 per cent “for now”.
And the Bank’s chief economist Huw Pill said on Wednesday that it was “hard to dispute that inflation persistence in the UK continues to prove, well, persistent”.
James Smith, developed market economist for ING, said: “Policymakers are still almost exclusively focused on services inflation, and it’s the one remaining release of this data that will determine whether the Bank can cut rates in August.”
But he said that “barring any big surprises” in the inflation data, he is expecting the Bank to want to start cutting rates this summer.