Feelgood factor liable to be offside for the economy, says Halifax

If Gordon Brown imagines that victory for England in today's World Cup quarter-final with Portugal will generate a feelgood factor for the economy, he could be in for a nasty surprise.

On only two occasions have England progressed beyond the last eight in the 12 tournaments they have played in, and neither 1990, when Gazza blubbed, nor 40 summers ago when Bobby Moore lifted the Jules Rimet trophy, were vintage years for the prosperity of the nation. Far from it, according to a study issued today by the Halifax.

In 1990, when England lost on penalties to Germany, the economy was on the brink of a painful recession. Interest rates were at 15% in an attempt to kill off the Lawson boom of the late 1980s, and millions of families were about to find out the meaning of negative equity.

In 1966, the sight of Nobby Stiles cavorting round Wembley helped to divert attention from a package of austerity measures introduced by Harold Wilson's government 10 days earlier to ease pressure on the pound. A six-month pay freeze was not only hugely unpopular but failed to do the trick. Little more than a year later, sterling was devalued.

Since 1950, year of the first post-war World Cup, growth has averaged 2.5%, but in 1966 it was below par at 1.9% and in 1990 it was a paltry 0.8%.

The buzz from progress in the World Cup provided, at best, a temporary boost for retailers. Consumer spending grew by 1.7% in 1966, and by just 0.8% in 1990.

The Halifax research suggests that the economy actually does better in the years when England are knocked out in the quarter-finals. On those occasions, growth has averaged 2.5%, and consumer spending growth has been well above its long-term average at 3.8%. Somewhat worryingly, Mr Brown believes the economy will grow by around 2.5% this year as well.

The Halifax found no evidence that failure to qualify for the World Cup was good for the economy either. In years when England failed to reach the final stages - 1974, 1978 and 1994 - growth averaged 2.2%.

Martin Ellis, chief economist at the Halifax, said: "Our research shows the World Cup feelgood factor sadly appears to be a myth. Nonetheless, we wish the team well against Portugal. A successful World Cup campaign would certainly lift the mood of the nation, even if it doesn't have a discernible impact on the economy."