After a turbulent year and several distributions, sporting events are slowly getting back to what they used to be, including this year’s Wimbledon Championships. But with higher spectator capacities than before, will the ‘Wimbledon effect’ sprinkle its magic on the economy, and what can investors expect from the value of the British pound when forex trading online? Read on, as we explore the impact of this iconic sporting event on the forex market.
The Championships 2021:
For this year’s Wimbledon Championships, the All England Lawn Tennis & Croquet Club (AELTC) worked closely with the government, public health bodies, and the local authority in Merton, to establish the tournament as a pilot event in the UK’s roadmap.
As part of the coronavirus restrictions, sporting facilities, stadiums, and arenas were completely shut to fans. Matches still took place but behind closed doors, and so was the situation until July 2021, when the government then published their Events Research Programme (ERP). This aimed to examine the risk of transmission of COVID-19 from attendance at events, and explore ways to enable people to attend a range of events safely.
These events took place across the country and ranged from the FA Cup Semi-Final and Final in Wembley Stadium to the Wimbledon Championships in London. For the legendary tennis tournament, this allowed for 50% of the normal capacity of spectators to attend, with 15,000 visitors allowed on Centre Court for the Finals weekend.
AELTC Chief Executive, Sally Bolton OBE commented on the participation in the ERP:
“Our aspiration is to stage the best Championships possible, but it has always been our absolute priority to do this safely. We hope that the COVID-status certification requirements for ticket-holders, and the Minimised Risk Environment for players, their teams and officials, will provide reassurance to those in our community, and all those who make Wimbledon happen, that we will deliver on this paramount objective.”
Despite the excitement of fans and players alike from taking part in the research event, which allowed an audience for the matches, the capacity is still lower than pre-pandemic levels. So, did the sporting event really still provide a boost to spending in the local area, and the UK economy?
The Wimbledon Effect:
A common analogy in British and Japanese culture, the ‘Wimbledon Effect’ denotes the relationship between the tennis game of the Wimbledon Championships and the economic success of the UK’s financial industries. And although it is used in several different contexts, it can also be the term for the economic boom that the tournament brings to the UK.
For a standard tournament, in pre-pandemic times, 500,000 people usually attend the Championships, and along with them, they bring their tourism and money. In normal circumstances, around 28,000kg of strawberries is consumed, with a staggering 350,000 cups of tea and coffee, over the two-week period of the sporting event.
This usually bodes well for the local area, as shops, restaurants, and takeaways, all take advantage of the extra footfall and see a major boost in their profits. But it’s not just the nearby region that benefits, as every retailer has ‘Wimbledon fever’ and implements themed marketing efforts to boost their business during this time.
In 2017, the AELTC in fact announced a profit of £32million, which had risen by an impressive £25.6m over the decade before. By the end of the financial year in 2020, they had reported an even more impressive operating profit of £40.5million. This was a drop from £50.1million the year before but still boasts well amidst the pandemic-related difficulties and cancellations.
The British Pound:
There has been a rise in the value of the British Pound, at the time of writing, rising to 0.41% against the US dollar to 1.37986. There was an increase against the other major currency of the Euro, with a rise of 0.20% to 1.1698. Although this coincides with the successful sporting events that have been included in the government’s ERP, this is also a reaction to the fall in COVID-19 cases that the country has experienced.
As there have been five consecutive days of a decline in cases, alongside the lifting of restrictions and boost of sporting events for the country, investors should take these factors into account when evaluating their fundamental analysis of the forex market.