Taylor Swift London Eras Tour unlikely to move the needle on the Bank of England’s rate policy, analyst says

LONDON — Taylor Swift’s record-breaking Eras Tour may have led to a surge in restaurant and hotel bookings in the U.K. — but it’s unlikely to have a significant impact on the Bank of England’s rate cutting policy, one analyst told CNBC.

The pop artist returned to Britain this week for five additional concerts to add to her total of eight shows at Wembley Stadium this summer — overtaking the record for any solo singer to perform at the stadium.

Barclays predicted in May that 1.2 million ticket-holders would spend an average of £848 ($1,105) each, meaning the tour could provide a £997 million boost to the U.K. economy.

The Eras Tour concert creates a “really significant economic multiplier effect,” said James Rossiter, head of global macro strategy at TD Securities.

“Where we’ve seen a bit more of a durable impact this time around, is on the restaurant bookings,” Rossiter told “Squawk Box Europe” Wednesday.

“So we look at [online restaurant-reservation service] OpenTable data, for example, and we did see a spike in June around her concerts here, and we’ve actually seen a big surge again over the weekend.”

However, the concerts had less of an impact on airfare and hotels, according to Rossiter who explained that a big city like London will often see an increase in tourism in the summer.

TD Securities currently has a base case that the Bank of England will implement a quarterly pace of 25 basis point cuts, Rossiter said. Earlier this month, the Bank delivered its first interest rate cut in more than four years, taking the key rate to 5%.

TD Securities previously said that the Eras Tour could be enough to defer a possible September interest rate cut — such is the potential impact it could have on the country’s inflation data.

Rossiter said Wednesday that he expects the central bank will act “cautiously” when implementing rate reductions.

“The tone of their August meeting was quite a cautious one. They certainly are nervous about some of the underlying data. I mean, you look at wage growth above 5%, you look at where services inflation is right now, core inflation is still 3.3%, they’re not quite there in terms of being comfortable racing back down to neutral,” he said.

Big events such as a Coronation or a Taylor Swift concert complicates the role of the Bank of England as it adds “distortions” to the data that the central bank analyzes when making decisions on monetary policy, Rossiter said.

But he added that the Eras Tour would not typically impact inflation further down the road.

“I think [the Bank of England is] going to look through sort of distortions like this Taylor Swift impact, focusing a bit more on the wages and some other elements of inflation, and really just kind of play it very, very cautiously,” he said.

The tour has had a “significant impact” and has been welcomed by the hospitality industry alongside a summer of sport, UK Hospitality CEO Kate Nicholls told “Street Signs Europe” on Wednesday.

“I think Taylor’s multi-generational demographic audience means that people come for longer,” Nicholls said.

“They pre-book, they eat and drink out and socialize around it, and that’s been incredibly welcomed by the restaurants and bars around the concert venues.”

The CEO added that the shows “saw hotel occupancy up at about 96%, that is far higher than you would see at those other comparable days.”

“We have seen a large influx of foreign visitors coming, and we know that music tourism, sports tourism and entertainment events is a real boost and a significant boost to the U.K. economy. It’s our second-largest services export earner, and it’s our fastest growing export earner, so it’s a really good showcase for the U.K. hospitality and tourism sector,” Nicholls said.