An extra public holiday for Charles’ coronation is putting further pressure on the British economy

According to economists polled by Bloomberg News, British GDP will fall 0.7 percent in May. This could lead to a contraction of the economy in the second quarter. According to ING economist James Smith, the temporary slowdown caused by the extra day off is “a key reason why total GDP will turn negative in the second quarter”.

It is the second time in a year that state events have weighed on British growth. The experience in 2022, Smith says, is “less pronounced than in previous years,” with additional days off in June and September.

For example, after an extra day off for Queen Elizabeth’s funeral in September, GDP fell by just 0.1 percent in the third quarter of 2022. Most of the shops and restaurants were closed for the day due to the event.

Deutsche Bank economist Sanjay Raja expects GDP to shrink by 0.5 percent due to the extra holiday in May, contributing to a smaller drop in output in the second quarter. “Sectors like hospitality and leisure are likely to thrive, while others will gain from the extra working day lost,” Raja says. However, the recovery will be quick next month as production drops due to the extra day off.

During Queen Elizabeth’s Golden Jubilee in June 2002, UK GDP fell by 2.2 per cent that month. In June 2012, production fell by 1.4 percent due to its diamond jubilee celebration and in June 2022, its platinum jubilee fell by only 0.7 percent.

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