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Royal baby born: Birth could give £243M boost to UK economy.

Royal baby born: The royal baby's birth should give a brief, sizable economic boost to the United Kingdom, analysts say. With a royal baby born, the lasting winners will be brands that the new parents purchase.

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A news cameraman reads a newspaper across from St. Mary's Hospital's exclusive Lindo Wing in London, Monday, July 22, 2013. Buckingham Palace officials say Prince William's wife, Kate, has been admitted to the hospital in the early stages of labor. With a royal baby born, the British economy could get a £243 million boost, analysts say.

Lefteris Pitarakis/AP

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The royal family just got a little bigger, with a royal baby born to the Duke and Duchess of Cambridge Monday evening. And so is the British economy – at least temporarily, according to economists.

The queen’s loyal subjects will spend approximately  £243 million (or $372.6 million) celebrating the prince’s birth, according to the UK-based firm Centre for Retail Research (CRR). That estimate includes £87 million on celebrations and party supplies, £80 million on merchandise like souvenirs and toys, and £76 million on media including books, DVDs, magazines, and newspapers.

“The impact on the UK economy is likely to be limited – albeit overwhelmingly positive,” Howard Archer, chief UK economist for IHS Global Insight, wrote in an e-mailed statement. “At the margin, the royal birth may provide the economy with a temporary, small positive boost at a time when it seems to be increasingly moving in the right direction.”

Most of the bump will come from the retail sector, with British gift shops hawking everything from key chains to onesies to special edition tea to mark the occasion. But Mr. Archer notes that other areas have seen big gains as well. Coral, a leading betting website in the United Kingdom, told Australian newspaper The Australian that the royal baby was the biggest non-sporting betting event in the company’s history.

“There may also be a limited ‘feel good factor,’ helped by some improved news on the economy and possibly further fuelled by the extended good weather and a number of recent sporting successes (the Ashes, Andy Murray winning Wimbledon, and Chris Froome winning the Tour de France),” Archer writes.

Unlike other royal-centric events, including Kate Middleton's 2011 wedding to Prince William and Queen Elizabeth’s Diamond Jubilee last year, the baby’s birth won’t be declared a public holiday. That means there won’t be any obvious economic drawbacks, like the loss in worker productivity that comes with an extra day off, analysts note. “The extra public holiday relating to both the Diamond Jubilee celebrations and the Royal Wedding did have a negative impact on the economy through hitting output and services activity, as well as limiting retail sales on the day in question,” Archer writes.  “While some of this lost economic activity was subsequently made up, there was undoubtedly a significant overall loss from this factor. “

The biggest winners, however, could be manufacturers of baby gear, especially brands used by the Duke and Duchess. The Centre for Retail Research expects sales of prams (baby carriages) to get a “royal bump” and rise 13 percent.

And Kate’s outsize economic influence on the fashion front will likely carry over into the product choices she makes for her son.

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 “One of the biggest factors will be the unintentional royal brand endorsement,” CRR director Joshua Bamfield said in the firm’s press release. “The carriage of choice for the royal arrival will no doubt become this year’s best selling pram for new and existing parents. The ‘Kate effect’ has already taken the fashion world by storm with each of her choices flying off the shelves within moments of her leaving the house. This trend will follow for the heirs baby grows, rattles, first bike and so on. It’s a culture of ‘keeping up with the Cambridge’s’ that isn’t going away, albeit a very profitable culture for the retail sector.” 


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