There has been some speculation that Wednesday’s UK CPI data for July will include an “Oasis bump”. In fact, the fallout from the reunion gigs is unlikely to have a significant impact on UK-wide inflation, and even less likely to influence UK monetary policy. Nonetheless, this is an interesting angle, so here goes anyway. (I’ve also included 15 Oasis song titles for pop pickers to spot!)
The basis for the speculation is that the reunion gigs may have triggered a spike in prices – not for the tickets themselves (the ONS typically excludes ‘one-offs’ like this) but for the many related goods and services, including accommodation, hospitality, merchandise, travel, and even cigarettes & alcohol.
Moreover, there are several precedents all around the world.
The best known is Beyonce’s two gigs in Stockholm in May 2023, which were estimated to have added 0.2-0.3 percentage points (pp) to Swedish inflation that month. Not enough to take it supersonic, but still significant.
But any Oasis bump will surely be smaller. In part this is a question of scale. The UK economy is roughly six times larger than Sweden’s, so even the biggest rock’n’roll star is much less likely to move the dial.
Indeed, it’s not certain that there will be a measurable bump at all. The CPI is taken on either the second or third Tuesday of the month. If the latter (15th July), this might pick up the Manchester gig on the 16th. But if the former (8th), this may be too soon for the gig on the 11th…
Even if there is a measurable bump (0.1pp, or more), the ONS will presumably draw attention to it and a bell will ring.
This would provide an excuse for the Bank of England’s Monetary Policy Committee to look past what should only be a temporary boost and which should slide away quickly.
Some might say the biggest fear right now is that a longer period of higher headline inflation could drive a ‘wage-price spiral’, even if only little by little. But any ‘Oasis bump’ will surely cast no shadow over future pay negotiations.
This fear of a wage-price spiral is (probably) all in the mind anyway, given the further evidence that the UK labour market is continuing to cool.
Finally, the nature of reality is that interest rates are almost certainly going nowhere at the next MPC meeting in mid-September anyway. Instead, the one in early November is key, and there will be many more important factors to consider by then (notably the fallout from the Autumn Budget).
In short, any Oasis bump will fade away before it is ever likely to matter for monetary policy. In the meantime, the MPC should be able to roll with it. But if one does show up in the data on Wednesday morning, glory be to those who have highlighted this risk!
Plain-speaking Economics 