Royal Baby to Boost U.K. Economy

When Kate delivers the latest royal baby, the nation can celebrate additional economic stimulus as well.

(Lefteris Pitarakis/AP)
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Just by being born, the United Kingdom's newest royal bundle of joy will have already improved the lives of his or her countrymen, if only by a small amount.

Analysts say the nationwide celebration will provide a small boost to the U.K. economy. Nottingham-based Centre for Retail Research estimates that the royal baby will have boosted the U.K. economy by 243 million pounds, or more than $370 million, during the course of July and August.

New parents will supply a significant share of that spending, says Joshua Bamfield, director of the Centre for Retail Research.

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"The people selling baby wear and nursery equipment – to them it's very, very exciting," he says, pointing to the boost in sales that stroller company iCandy saw after celeb couple David and Victoria Beckham bought one of that company's models for their daughter, Harper, born in 2011. New British parents might likewise take their cues for baby paraphernalia from the royal couple. Altogether, CRR expects a 13 percent bump in stroller and carriage sales this year.

In addition, relatives of 2013 newborns may decide to buy baby gifts to commemorate their babies' shared birth years with the new princess or prince.

 

"There's a category of people where their babies are born in 2013, and the parents, grandparents, those people have told us they expect to buy souvenirs for the infant," he adds.

Many Brits will likely want to celebrate the birth with their friends, meaning upticks in food and alcohol spending. For this reason, shop owners have been on their own baby watch, says Bamfield.

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"When we look at celebrations and so on, we're thinking about supermarkets who have been organizing for this for some months," he says.

While 243 million pounds in retail sales is great news in particular for England's grocers and baby clothiers, the amount is modest in the context of other recent royal celebrations. CRR initially estimated Queen Elizabeth II's 2012 Diamond jubilee would boost retail spending by around 509 million pounds, and that the royal wedding in 2011 would add 527 million pounds. Altogether, says Bamfield, the baby's birth will boost U.K. retail spending by around 0.5 percent.

One other reason the boost in spending may ultimately be modest: there's also the possibility that all of this fevered royal baby spending will displace other spending – parents may simply buy their children souvenir onesies in place of other clothing, for example.

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Still, says one analyst, the royal birth has one benefit that the wedding and jubilee did not have: the nation isn't taking time off to celebrate it.

"The extra public holiday relating to both the Diamond Jubilee celebrations and the Royal Wedding did have a negative impact on the economy through hitting output and services activity, as well as limiting retail sales on the day in question," writes Howard Archer, chief U.K. and European economist at IHS Global Insight, in a commentary regarding the birth.

The newest member of the royal family will also make for economic benefits outside of U.K. shops. Archer notes that bookies have been seeing an uptick in activity from bets on the baby's sex and name. And Bamfield adds that the media frenzy will likely mean a boost in newspaper sales.

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