We did it, Britain — we kept CPI on target!
[Twee-est music you ever heard kicks in.]
[In soft, warm Yorkshire accent]
This one’s for the international tourers…
. . . the multi-buy-offer ignorers…
. . . the small mammal adorers…
. . . the targeting core-ers.
Thank you, Britain.
The pound hit a one-year high against the dollar on Wednesday after UK inflation figures came in slightly above expectations at 2 per cent for June.
Underpinning the stronger-than-expected reading was one key thing: hotels.
On the CPIH measure, which includes homeowners’ costs, prices for hotels and restaurants were up 0.9 per cent in a month, compared with a 0.5 per cent increase over the same month a year ago. The Office for National Statistics said this rise “was almost entirely because of the price of hotels”.
Here, via Bloomberg, is year-on-year CPI inflation for hotels and, for purposes of comparison, concert/cinema/theatre tickets:
What this article is actually about
So, we hear you asking, what does this all mean for Taylor Swift?
Well, as we somewhat predicted in a non-committal way last week: it really, really looks as if — shock, horror — she was probably irrelevant.
First up, those concert ticket prices. As most people probably know by now, tickets to Swift’s Eras tour, which arrived in the UK last month, were bloody expensive, even on a cover basis. And — as we’ve subsequently clarified with the ONS — they would have been imputed into the figure whenever in the month the actual gig took place (the ONS is flexible on this point to ensure the comparability of different artists).
So the fact that the index barely moved at least suggests that Eras ticket prices, if observed at all, didn’t shift that inflation component. There was a marked big rise in the smaller live music component, but that is a minuscule part of the overall index.
So, no material inflationary boost from tickets. What about the pop in hotel prices? Is this the ‘TSwift Lift’ in the UK?
As we mentioned last week, the likely target collection dates for June’s inflation figures were either the 11th or 18th of June, with the former more probable. The ONS’s release confirms:
The figures in this publication use data collected on or around 11 June 2024.
And, as also mentioned last week, the 11th lands in dead zone relative to Eras dates:
As TD Securities’ Lucas Krishan and Pooja Kumra put it in a note this morning:
While the surprising strength in the hotel component might at first glance suggest that Taylor Swift ended up having a larger impact on prices than expected, we would caution against this view. The index day for the June report was 11 June, and this did not line up with any Taylor Swift concerts.
As Jefferies’ Modupe Adegbembo observes this could just reflect . . . any manner of the other things that occur in June:
While the surprising strength in the hotel component might at first glance suggest that Taylor Swift ended up having a larger impact on prices than expected, we would caution against this view. The index day for the June report was 11 June, and this did not line up with any Taylor Swift concerts.
Cool, sorted.
Now, let’s check the headlines:
Sigh. And, uh, perhaps the scenes at the Bank of England:
Still, we love a challenge, so let’s see if we can find any solid evidence of Swiftflation in these figures.
But first, there’s time to briefly dwell on a greater cause for concern.
Briefly dwelling on a greater cause for concern
What is going on with hotel prices? The category keeps registering chunky rises, despite substantially more sober signals from companies:
Compare and contrast with the word from Whitbread, owner of Premier Inn, which represents more than a tenth of the UK housing market and presumably has the pricing power to reflect that. In a trading update last month, they said room prices were down year-over-year:
Why is the ONS producing such a different picture to the real world? Let’s look at their numbers.
We mentioned last week that the ONS does not published detailed information on observed ticket prices. Thankfully, they do do so for hotel prices, under the “Hotel 1 Night” item.
The stats body’s agents observed 125 individual hotel prices in June, of which only 56 were deemed to be valid:
So, a nice range from £54 to, umm, £636. (The median of those figures is £140.50, but the ONS moves in mysterious ways.)
Is this enough data? We’re not sure, but it certainly doesn’t seem like much, especially without taking other indicators into account. Either way, weird.
UK inflation (Taylor’s version)
Let’s finish by returning to Tay Tay.
It might be worth dwelling on the number of invalid prices gathered in June — 68 were rejected for having a price of zero, which might suggest sold-out hotels. That could be Swift-related, but 56 were rejected for the same reason in May so it feels like a bit of a reach.
Trying another path, here’s the breakdown by region:
Eyeballing our date chart above, it’s really only the North West that should be relevant to Swift — she played Anfield (in Liverpool, in the north west of England, if that needs saying) on June 13th, the only date that seems like it could conceivably be described as “on or around” collection day on the 11th. If there was any Eras-related price gouging, that’s where we’d find it.
As Peter Donaghy points out on X, 34 of the price quotes used in June were for locations that had valid price in May.
Here, in a fresh bit of chart abuse, is how the May and June prices compare. We’ve combined the region and shop codes for each price to generate unique IDs for each hotel price vendor, in the process creating what sounds like a bunch of glamorous provincial police shows.
Prepare to scroooooooooooooooooll:
What, if anything, can we learn? Well, two hotels apparently massively jacked up their prices over the month: Wales 18982, from £133.50 to £369, and North West 5106 from £85.99 to £210.99.
So, boiling it down, perhaps Taylor Swift did contribute to UK inflation in June after all — by possibly prompting one hotel, possibly in Liverpool, to possibly price gouge ahead of her Anfield appearance. Stellar stuff, hold the front page.
