Financial markets: Economic indicators
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The latest government estimate is that an additional bank holiday would cost the economy £2.4 billion.
Cost of a bank holiday (120 KB , PDF)
There are regular calls to introduce new bank holidays to mark events including sporting victories and saints’ days. The overall economic impact, likely to be a cost, associated with an additional bank holiday is hard to measure accurately, and estimates vary.
In February 2022, the Department for Digital, Culture, Media and Sport published an impact assessment of an additional bank holiday to mark Queen Elizabeth II’s Platinum Jubilee in June 2022. This estimated the cost to the economy, in terms of GDP, to be £2.4 billion.
The impact assessment accounts for a loss of output in most sectors due to business closures which is partially offset by an increase in output for the retail and hospitality sectors, plus domestic and international tourism.
The impact assessment also tries to account for ‘bounce back’ growth in the period following a bank holiday. This refers to economic output that is displaced, rather than lost, from businesses being shut.
It is difficult to estimate the cost of a bank holiday because there is no counterfactual to compare to what actually happened. Therefore, we must create a hypothetical estimate of what would have happened if every other economic development except the bank holiday occurred. In reality, this is very difficult to do with any accuracy.
Cost of a bank holiday (120 KB , PDF)
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