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Olympics To Give UK Economy £16.5bn Boost

(c) Sky News 2012

The Olympics will deliver a £16.5bn boost to the UK economy by 2017 and help create the equivalent of 62,200 jobs, a new report has claimed.

The estimated benefits are from 2005, when the Games were awarded, to the five years after the Games finish, and will come mainly as a result of building Olympic sites and the boost to tourism, according to the study by Lloyds Banking Group (LSE: LLOY.L - news) .

Lloyds, whose Lloyds TSB is a London 2012 sponsor, said nearly a third of the gains - worth £5bn - will come over the five years following the event.

This will be when Olympic sites are converted to other uses and tourism continues to see a boost.

And there will also be a "happiness effect" as the Games boost the public mood and spark a rise in consumer spending.

Lloyds chief economist Patrick Foley said: "London 2012 is the most important sporting event the UK has ever staged.

"We've witnessed a construction project on an unprecedented scale, the economic ripples of which are being felt not only in the host City, but across the UK.

"As this study demonstrates, London 2012 will help support employment, tourism, consumer spending and living standards, not only this year, but for many years to come."

The Games are expected to attract 10 million visitors, including 1.2 million from overseas, but the country's tourism will continue to gain a knock-on effect over the next five years.

Games-related tourism will generate £2bn of GDP across England, Scotland and Wales.

But the lion's share of the GDP gains will come from construction, which will have contributed £13.5bn to GDP by 2017.

Some 57% of the overall boost to GDP stems from construction projects ahead of the Games, including building the Olympic Park and other sites across the UK.

And 24% of the total boost to GDP will come from further construction activity.

Building the Olympic Park has contributed £2.3bn to the economy and building the other main venues added £1.3bn.

London will get £6bn of the overall benefits but the rest of the UK will get £10.5bn.