British Prime Minister David Cameron was yesterday due to use the London Olympics to drum up business opportunities on the first day of a series of trade and investment events he hopes will harness the Games to help drag Britain out of recession.
Dignitaries such as IMF managing director Christine Lagarde and the heads of global firms such as Google’s executive chairman Eric Schmidt are expected to attend the first of the business events yesterday evening.
Britain hopes to seal ￡1 billion (US$1.548 billion) worth of deals this summer as businesses capitalize on the Olympics, the first to be held in Britain since 1948.
“I believe the legacy of these Olympics can be about many more things as well as great sport — for instance, it can be about great business too,” Cameron was to say in extracts of the speech he was expected to give at yesterday’s event.
“Yes, I want medals for Britain. And there will be no more passionate supporter of Team GB than me. But I’ve got a job to do this summer. And a big part of that job is to get behind British business,” the speech added.
Cameron is under pressure to turn around Britain’s economic fortunes. On Wednesday, data showed the economy shrank far more than expected in the second quarter, battered by everything from an extra public holiday to the eurozone crisis.
GDP slumped 0.7 percent between April and June from the first three months of the year on steep output declines in the construction and manufacturing sectors, the Office for National Statistics (ONS) said.
Output was also impacted by an extra day’s public holiday in June for Queen Elizabeth II’s diamond jubilee celebrations and by very poor weather. Britain suffered its wettest quarter on record in the reporting period.
Britain escaped a deep downturn in late 2009, but fell back into recession in the final quarter of last year on the back of state austerity and the debt crisis in major trading partner the eurozone.
Finance minister George Osborne described the latest GDP data as “disappointing,” but insisted that the government was dealing with its “debts at home and the debt crisis abroad.”
The April-June contraction was the biggest quarterly fall since the first quarter of 2009.
Britain was already in recession after posting two successive negative quarters since late last year. GDP shrank 0.4 percent in the fourth quarter of last year and by 0.3 percent in the first quarter of this year.
The ONS on Wednesday added that GDP contracted 0.8 percent in the second quarter compared with the same period one year earlier.
The Games are costing ￡9.3 billion to stage — more than four times the original estimate — but the government is confident they will help Britain attract ￡6 billion in investment by 2016.
A poll released on Wednesday showed more than half of British-based employees believe the Games will have no effect on workforce morale as the country struggles to exit the deepening recession.
A survey by business performance consultants Lane4 — a firm run by Olympic swimming gold medalist Adrian Moorhouse — said 58 percent of respondents thought the Games would have no effect on sentiment.
A further 18 percent claimed that any morale boost from the Olympics would be “short-lived.”