Taylor Swift’s concerts are so popular in Europe that they trigger short-term inflation

If you’re not familiar with Taylor Swift’s big tour, I envy you a little – summer must be nice and cool in the cave you live in. The Eras Tour kicked off in March 2023 and consists of 152 shows on five continents, ending in December 2024. It is by far the highest-grossing tour of all time and the first to ever surpass the $1 billion mark in revenue (and it’s still going).

But the impact of the tour goes beyond pure income.

Swift’s tour sparked a cultural frenzy similar to the Beatlesmania of the 1960s. Fans went wild and paid huge sums to attend the concerts. Especially in Europe, where international travel is relatively easy, many fans came from abroad to see the concerts. They paid hundreds of dollars for concert tickets, hundreds for additional accommodation and travel, and probably a few hundred more for souvenirs, food, and other items.

In countries like Sweden and the UK, this even had an impact on national inflation.

Swifties, culture and inflation

Inflation is the rate at which general prices of goods and services increase, leading to a decrease in purchasing power. When prices rise, each unit of currency can buy fewer goods and services, effectively reducing their value. Sweden’s core inflation rate rose unexpectedly, influenced by Taylor Swift’s concerts and the Eurovision Song Contest. These events drove up service prices, especially for hotels and restaurants.

Swedish core inflation (excluding energy costs and interest rate effects) rose 3% year-on-year, exceeding both analysts’ expectations and the central bank’s forecast. A small part of this inflation was due to an increase in overnight accommodation prices due to the 180,000 visitors to the Eras concert in Stockholm. Stockholm has a population of around 1 million, while Sweden has around 10 million.

And it’s not just Sweden.

The unexpected rise in inflation due to Taylor Swift’s concerts is mirrored by events in the UK, where the Eras Tour and other high-profile events are causing faster price increases in the services sector. Swift’s concerts have significantly increased hotel and service prices. Naturally, this complicates the efforts of UK and Eurozone policymakers to assess inflation trends and make decisions about interest rates. So, in essence, Swift’s concerts are causing inflation.

The Swift Effect

This phenomenon, known as the “Swift effect,” reflects broader trends in which major events cause temporary spikes in services prices, thereby influencing policy decisions. As policymakers deal with these anomalies, central banks must carefully interpret the data to avoid making hasty decisions based on such events. Analysts point out that such events can distort inflation numbers, making it difficult to determine the underlying strength of inflation.

However, the European Central Bank (ECB) says this effect is not “sustained.” Christine Lagarde, President of the ECB, told CNBC: the Swift effect is not a significant long-term contribution, but rather a bizarre temporary effect.

In Sweden, the central bank acknowledged the Swift effect, noting an 11 percent increase in hotel prices in May. But while Swift’s presence may have contributed to price increases, it is unlikely to account for a significant share of overall inflation.

Nevertheless, the Swift effect has been widely documented and has had a significant economic impact wherever she performs. Her concerts have not only influenced inflation rates, but have also brought significant financial benefits to the local economy. For example, reports suggest that Swift’s tour of the UK could bring a billion pounds to the economy, driven by spending on tickets, accommodation, travel and other related expenses. This massive economic impact underscores the wider cultural and economic significance of Swift’s tour.

This is not the only effect Swifties have.

Taylor Swift’s concerts also triggered seismic activity equivalent to a 2.3 magnitude earthquake. While this is not enough to cause damage, it still beats previous records set at football matches and other concerts.

While politicians and economists grapple with the temporary impact of such major events, the lasting legacy of Swift’s tour is clear: It’s about more than just music and money. It reshaped the entertainment industry and left a tangible mark on the global economy. As Swifties eagerly await the next leg of the tour, economists are taking notes.