London Spy

Olympics ‘will have paid for itself by 2021′

London Spy

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Leading economists have said that ultimately the London Olympics will starting making the city money - although not until 2021.

The Games came in at a revised budget of £10 billion, although the Centre for Economics and Business Research also said that people who stayed at home or took holidays during the Olympics cost the economy £1bn — taking the total cost of the Games to £11bn.

The Stratford area of East London was transformed by the Games and CEBR said that if politicians properly exploited the regeneration of the area then they could start generating an extra £1.8bn-a-year into the economy.

Their report, which was authored by Douglas McWilliams and Daniel Solomon, said: "We have done some simple econometrics which indicates that countries that have had Olympic Games or equivalent events have had slightly more growth than might have been expected in the three to five years afterwards.

"Provided that both national and local politicians are single minded about focussing on growth, there is a very good chance that the Olympic Games could turn out to be the icing on the cake for East London, making a critical difference to the area's regeneration.

"For London as a whole, our econometrics implies that London's annual output growth (in Gross Value Added terms) could be boosted by 0.6 percentage points per year.

"We expect this effect to take a few years to kick in. Ultimately, we estimate that between 2015-16, London's annual output growth could be increased by £1.8billion in today's money - a real Olympic legacy."

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