Taylor Swift’s London Eras Tour could delay Bank of England rate cut, analysts say

LONDON — Taylor Swift’s record-shattering Eras Tour is continuing to supercharge consumer spending as it enters its U.K. leg, suggesting that the Bank of England may not be out of the woods yet in its fight against inflation.

As hundreds of thousands of dedicated Swifties flock to London in August to see the singing sensation in during her final U.K. dates, the economic boost could be enough to defer a possible September interest rate cut, according to investment bank TD Securities.

“We still anticipate a BoE cut in August, but the inflation data for that month might keep the MPC (Monetary Policy Committee) on hold in September,” the bank’s macro strategist Lucas Krishnan and head of global macro strategy James Rossiter wrote in a note Friday.

The Bank of England is expected to soon begin lowering its Bank Rate from a 16-year high of 5.25%, with all but two of 65 economists polled by Reuters anticipating a cut in August, while financial markets are pricing in September.

However, a possible clash between one of Swift’s August tour dates and a key inflation index day could skew the data enough to make the bank rethink its path, the analysts said.

“A surge in hotel prices then could be material, temporarily adding as much as 30bps to services inflation (+15bps on headline),” Krishnan and Rossiter wrote.

The BoE did not respond specifically to the comments when contacted by CNBC, but said that “the MPC look at a wide range of economic indicators when they make their decisions on interest rates.”

The economic impact of Swift’s sell-out tour has been well-documented, with terms such as “Swiftflation” and “Swiftonomics” emerging to refer to the spike in spending on services such as hotels, flights and restaurants around her performances.

Edinburgh, Scotland, where the Grammy winner began her U.K. leg earlier this month, said that the concerts and associated spending had added up to an estimated £77 million ($98 million) to the local economy. In a separate note, Barclays banks said the full U.K. tour could add an estimated £1 billion ($1.27 billion) to the British economy.

TD Securities said the latest data pointed to a “larger than usual” uptick in hotel prices in the Scottish capital during Swift’s visit last weekend, while the upside pressure was less pronounced in Liverpool, where she culminated her north west England leg on Thursday.

Swift is also due to perform in Cardiff, Wales and London later this month. While Swift’s Cardiff date may coincide with a June inflation index day, the analysts said the impact was likely to be minimal given the relatively small size of the city.

The Bank of England will meet next Thursday to give its latest interest rate decision and provide its outlook on the future course for inflation.