UNITED KINGDOM: OLYMPICS - Olympic golden glow for poverty stricken east London, but UK-wide the boost is set to fade fast

Record ID: 330630

  • Title: UNITED KINGDOM: OLYMPICS - Olympic golden glow for poverty stricken east London, but UK-wide the boost is set to fade fast
  • Date: 18th April 2012
  • Summary: LONDON, ENGLAND, UK (APRIL 17, 2012) (REUTERS) (SOUNDBITE) (English) WILLIAM HOBBS, ANALYST BARCLAYS WEALTH, SAYING: "There will be certain sectors that enjoy a bit of a bigger boost than others, for instance, leisure, advertising, certainly pubs, maybe bookies might see a bit of a boost, but in the long term I am not sure whether this will be discernible as a sort of positive impact for the UK."
  • Embargoed: 3rd May 2012 13:00
  • Keywords:
  • Location: United Kingdom, United Kingdom
  • Country: United Kingdom
  • Topics: Business,Economy,Sports
  • Reuters ID: LVABMPGXUBNZKAADTWW0L2JK8DGP
  • Story Text: Before the Olympic Park is even open, the gleaming new shopping centre next to it is already a destination for Londoners and tourists alike.
    The Westfield in east London's Stratford is Europe's largest shopping centre of its kind and will serve as the gateway to the Olympic Park for an estimated 70 percent of all Games tourists.
    It sits at the centre of the regeneration zone of more than 7 billion pounds of new infrastructure, an island of new stadiums, shops, homes and hotels surrounded by waterways, roads and railway lines.
    Regeneration of the east end began in the late 1980s, with pockets of wealth created nearby at Canary Wharf, now home to many financial institutions.
    But it took the Olympics to provide the kind of impetus never seen in Britain before in terms of pace and scale.
    The Westfield was brought forward by between five and seven years to meet the Games deadline.
    Once known as "stinky Stratford" because of its noxious industries and slaughterhouses, it has been in need of investment ever since the nearby docks, once the largest in the world, closed in the 1970s.
    Unemployment reached 20 percent shortly afterwards, similar to rates during the Great Depression of the 1930s.
    The gleaming modern new retail and leisure complex is a welcome addition to one of Britain's most economically deprived areas, blighted by unemployment and decrepit industries.
    "Wow, the area's really changed a lot. They've made the place very beautiful. This place is looking very nice," said local resident Diane Akim.
    "It's better because we have much more facilities. East London looks a bit prettier now with these buildings, so it's definitely a good development," said another local Ikram Samater as she strolled through the mall.
    Dozens of businesses were bulldozed to make way for the Olympic Park, mountains of of rubbish removed from the grimy waterways and hundreds of tons of contaminated soil cleaned of petrol, oil, tar and poisons.
    During the next 20 years, up to 11,000 new homes will be built, a new 33 million pound academic hub and a polyclinic created.
    The Olympic Park, athletes' village and the 1.4 billion pound Stratford City, a complex of hotels, offices and homes as well as Westfield, are expected to have created 46,000 jobs, with about 20 percent of the Olympic workforce coming from the six Olympic host boroughs.
    Westfield General Marketing Manager, UK, Myf Ryan said the Olympics kick-started regeneration, but it won't stop when the athletes and tourists leave town.
    "Westfield Stratford City is really just the first stage in the regeneration of east London. Stratford is now becoming a city within a city and we are very much in the first stage of that. It will absolutely continue on from now and then post the Olympic Games go even further," she said.
    The Westfield centre alone has created 10,000 new jobs so far, 2,000 of them have gone to local people who were previously unemployed.
    One of them is Daniel Osafo-Asare, who is now a concierge at the mall. He's been in and out of temporary jobs since leaving university a couple of years ago.
    With a university degree, he is over-qualified for his concierge job, but hopes it will lead to a new career.
    "Obviously I knew within one year you can apply internally. Concierge is a good job, it's something I enjoy the day to day in, but obviously I want to excel higher within that as well," he said.
    But if the country as a whole was hoping the Olympics would mark a turning point for a struggling economy, then it is in for a disappointment despite the government's efforts to cash in on the Games, according to analysts.
    Economists believe the Games will, at best, give the economy a minor and temporary fillip. The Olympics could lift the mood of a country in the grip of austerity measures, but experts say it will be difficult to maintain that momentum.
    A tourism campaign backed by Prince Harry and pop star turned designer Victoria Beckham is rolling around the globe branding Britain as "GREAT" to try to bring in millions of additional tourists in coming years.
    Aware of the allure of the Olympics for company chiefs and keen to show off British know-how, the government is staging a series of business summits to coincide with the event.
    In the midst of a grinding seven-year austerity programme, imposed to deal with the hangover from the financial crisis, Britain is determined to make the most of its Olympic summer.
    "The Olympic Games is the biggest opportunity the UK will get in a generation to showcase the UK," said Alan Collins, who works for a government department that promotes business.
    "We're determined on the business side to seize that Olympic gold moment to try to do the best we can for the economy, for jobs and for prosperity," added Collins, managing director, Olympic Legacy at UK Trade and Investment.
    Collins said British companies were already in demand in fast growing economies such a Russia and Brazil which will host winter and summer Olympics over the next four years.
    The government produces impressive figures for the impact of the Olympics - forecasting an eventual extra 1 billion pounds in revenues from the business drive and double that from tourism.
    However, short-term prospects are less rosy.
    "There will be certain sectors that enjoy a bit of a bigger boost than others, for instance, leisure, advertising, certainly pubs, maybe bookies might see a bit of a boost, but in the long term I am not sure whether this will be discernible as a sort of positive impact for the UK," said William Hobbs, analyst at Barclays Wealth.
    Retailers are hoping that the Games and celebrations in June of the Queen's Diamond Jubilee will help to get hard-pressed consumers spending again.
    There are precedents for major sporting events helping to revive large European economies. Germany experienced a "feel-good factor" when it hosted the 2006 soccer World Cup - a combination of good weather, a run to the semi-final and a general feeling it was putting on a fine show boosted the national mood and drove spending higher.
    However, economists believe the heady Olympic atmosphere will fade swiftly once the athletes leave town.
    Hobbs said a recent easing of inflation is more of a drive to increase consumer spending.
    "The fact that inflation is coming down is actually helping the UK consumer to start feeling a little bit better about themselves and so maybe it's that that is going to see the second half and maybe next year look a bit better, not necessarily anything in particular to do with the Olympics. I'm sorry not to give a more sort of specific Olympic boost view, but history just doesn't seem to back up a sustainable spike," he said.
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