Euro 2004 could spark British rate rise

BRITISH homeowners could pay a big bounty for England’s progress in Euro 2004 if the Bank of England raises interest rates to curb the splurge on booze, TVs and football regalia.

Ulster Bank Financial Markets economist Niall Dunne believes that England's wins in the tournament might prove a double-edged sword for mortgage holders as the spending boom may force a hike in interest rates.

It's estimated that £435 million (€654 million) has been spent by soccer supporters on new televisions and other electrical equipment to enjoy watching Euro 2004. Fans living in Britain are expected to buy an extra 451 million bottles of beer and 7.52 million bottles of wine, enough alcohol to fill 75 Olympic-size swimming pools.

British supermarkets are providing an estimated 21.1 million extra packets of sausages, 27.1 million packets of burgers and 3.76 million chicken drumsticks.

A massive 22.6 million extra pizzas will be on sale enough to cover 270 pitches.

However, while English home- owners might be prepared to live with the extra cost, residents of Scotland, Wales and the North might think it's a bit unfair to have to pay through the nose while watching England gloat. Mr Dunne said that there is no doubt English fans are happy to see their team progress to the knockout stages and are celebrating by spending.

"Prior to the Croatia game, the British Retail Consortium estimated the cost of defeat at £400 million (€601 million) for the British economy although they based that number on the assumption that England will make it all the way to the final.

"In other words, the BRC reckon that each England win is worth £100 million to the British economy in terms of additional spending each game is rumoured to be worth an extra £30 million to the pub industry alone," Mr Dunne said.

He added that it is well known that the Bank of England is not only worried about house price inflation and that it is also troubled by the related rise in consumer indebtedness.

"So, a £400 million spike in retail activity will no doubt be financed by credit, and that could force the Bank of England to raise rates again, possibly as early as July 8," cautioned Mr Dunne.

Meanwhile, Rooney-mania looks set to kickstart a rally for a clutch of financial stocks.

Sports clothing retailers and brewers are among stocks to draw increasingly positive comments from City analysts following the team's progress into the quarter-finals inspired by teenage striker Wayne Rooney.

Shares in England kit maker Umbro which only listed last month shot more than 5% ahead yesterday following Monday night's win against Croatia.