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Deutsche Financial institution this morning:
In June 2024, forecasters have been met with a sizeable upside shock to companies inflation. What occurred? Amongst a number of value will increase, lodging costs noticed a document month-to-month enhance. Many, together with us, cited the potential impact of the Taylor Swift Eras Tour, which seemingly lifted lodge costs in June. Will this occur once more in August when Taylor Swift returns?
FT Alphaville has considerably completely different views to Deutsche on Taylor Swift. As we wrote in mid-July, following June’s inflation figures, the pop famous person might not need to cop the blame for the soar in UK lodge value inflation.
Our commentary is that as a result of TSwift’s June Eras live performance dates didn’t intently overlap with the ONS’s assortment date (on 11 June), any affect that they had on lodging costs in all probability weren’t captured by the stats physique’s brokers (although one lodge within the North West did seem to have massively hike costs forward of her look at Anfield, on 13 June). Right here’s a chart we made then:
Listed below are some factors to hedge that view:
— The ONS assortment course of is, as we regularly complain, complicated and bizarre, producing strange outcomes.
— Value gouging is likely to be temporally broad. That’s to say, a lodge may not hike its costs only for the times immediately round a Swift live performance, and as an alternative do the entire week.
— To hedge THAT hedge, the notion of individuals “making per week of it” appears much less seemingly if 1) they’re offered with gouge costs for the complete week, and a couple of) it’s June, so faculties are nonetheless open.
— A great deal of issues occur over the summer time which may trigger lodge costs to leap.
— We basically don’t, and possibly can not, know whether or not any TayTay followers stayed at any of the inns the place the ONS’s brokers noticed costs, so this whole train is about hypotheticals.
To again up their thesis — that there was a TayTay impression — Deutsche have produced a brand new information collection, the dbDIG Resort Value Tracker. Sanjay Raja and Shreyas Gopal write:
Our dbDIG Resort Value Tracker captures value actions for almost 1,500 inns per week, throughout the most important cities within the UK . What we discover are clear jumps within the weeks when Taylor Swift toured by the UK within the month of June, with Edinburgh, Liverpool and London seeing 144%, 67%, and 22% value rises, respectively.
It’s an amazing chart, one which — whereas not incontrovertible proof — actually, actually strongly means that Scottish hoteliers have been gouging Swifties in June, with the same however rather more delicate impact noticed in Liverpool.
However there’s nonetheless an issue right here: despite the fact that these figures are in all probability a lot better than these utilized by the ONS, that doesn’t make them related to the calculation of UK CPI.
Sure, ‘Shake It Off’ lovers in all probability received rinsed by unscrupulous Picts, however she performed Murrayfield on 8 and 9 June (a Saturday and Sunday). By the point the ONS agent got here a-knockin’ (the following Wednesday), the gouging impact may moderately be anticipated to have a washed out, and subsequently wouldn’t have been captured.
To place it extra philosophically: inflation solely counts (within the macrostatistical sense) when the ONS observes it.
The rise in Liverpool is in fact extra compelling, but it surely’s a lot smaller, and it’s tough (for the explanations laid out above and in posts passim) to posit a clear Swift read-across for total lodge inflation from it.
Deutsche concludes:
Will we see the same impact in August? Sure, however [it] seemingly gained’t be to the identical scale we noticed in June. Certainly, August noticed Taylor Swift return solely to London on the again finish of her worldwide tour. And to make certain, London lodge costs noticed a softer value rise at 15%. Furthermore, Taylor Swift’s tour dates (sixteenth and seventeenth of August) might not even conflict with the ONS’ value assortment index day, probably mitigating the dangers of any huge upward shock in August lodge value inflation.
We’d once more enterprise that the reply is an easier no: that Taylor Swift will not be going to have any impression on August’s lodge value inflation information.
Once more, the dates simply don’t line up properly: August’s inflation assortment date was virtually actually the thirteenth (a Tuesday). Midweek gouging (nevertheless delicate) forward of two weekend live shows is clearly not not possible, but it surely feels considerably unlikely. (NB: We’ve famous the opposite attainable collections dates on the charts under, however each can be outliers by historic requirements.)
However, as we mainly at all times find yourself writing on the subject of ONS information… who is aware of?
Additional Swifting:
— Introducing the ‘TSwift Lift’
— Taylor Swift may hand out bigger bonuses than many banks this year
— Taylor Swift broke Spotify
— Bad Swiftonomics (Britain’s version)
— Why is it so hard to work out how much money Taylor Swift is making?
— Taylor Swift vs the Bank of England
— Desperately seeking Swiftflation
— What’s a new Taylor Swift album worth?
Additional studying:
— Transformation of consumer price statistics: July 2023 (ONS)