Foiled bomb plot won't hit economy
By Matt Falloon
LONDON (Reuters) - Britain's trillion-pound economy will feel barely any impact from Thursday's bomb alert at Heathrow airport that stranded thousands at the peak of the summer holiday season, experts predicted.
Police said they foiled an attempt to blow up aircraft in mid-flight between Britain and the United States, causing chaos at airports around the country as flights were cancelled and drastic security measures were brought in.
Share prices of European airlines took a pummelling but an early sell-off in the pound and rally in bond markets proved short-lived as analysts judged there was unlikely to be any lasting impact on economic growth.
"Could the foiled plot to blow up trans-atlantic flights leaving the UK have any discernible economic impact? We believe the short answer is: probably not," said Holger Schmieding, economist at Bank of America.
"Consumers and business people are unlikely to change their travel and spending habits by enough to affect the macro data for long."
That's as long as things quickly get back to normal. Maurice Fitzpatrick, business analyst at Grant Thornton, said that if travel to the UK becomes increasingly difficult, the situation could turn worse.
"It is not impossible to envisage north of 100 million pounds a day lost for the UK economy," he said.
Tourism and retail spending are likely to be the victims of any fallout if security fears keep people from travelling. August is by far the biggest month for visitors to the UK or for Britons travelling abroad.
