Study: Bank Holiday Costs UK Economy £2.3bn

Every bank holiday costs the UK economy £2.3bn in lost productivity, new research has suggested.

Economists at the Centre for Economic and Business Research (CEBR) say that days off are important for workers' wellbeing but suggest that bank holidays should be spread more evenly throughout the year to lessen their impact on economic growth.

CEBR economist Daniel Solomon said: "Money is not the only thing and a healthy lifestyle needs time off to reflect and relax.

"Our rough and ready calculations show that if the eight regular bank holidays were cancelled in an average year, annual GDP would rise by about 1.3%, or £19bn."

Although consumers tend to spend more on eating, drinking, holidays and DIY over bank holiday weekends, the impact of closed factories and offices outweighs the benefits, the CEBR says.

Sky News visited Battersea Park Zoo where bank holiday weekends are an important time of year which helps the business break even.

Retail manager Derek Ryan said: "They account for 80 or 90% of our trade throughout the year along with the weekends.

"If there were fewer, our business would inevitably suffer as would others in the leisure industry."

But the extra bank holiday for the Royal Wedding was blamed in part for a slow down to 0.1% in growth for the second quarter of 2011.

The Department of Culture Media and Sport estimates that the 2011 wedding of the Duke and Duchess of Cambridge cost the UK £1.2bn - 0.08% of GDP.

The bounce-back in growth to 0.6% for Q3 was also partly attributed to workers making up for lost time.

As Britain once again teeters on the brink of a second recession , there are warnings that another extra bank holiday for the Queen's Diamond Jubilee in June will drag down growth in the second quarter of the year.

The UK has fewer bank holidays than many of our European neighbours but more than the United States .

Mr Solomon added: "We probably had too many bank holidays in April and May last year when the Royal Wedding and late Easter combined with the May Day and early summer bank holiday to give five bank holidays in roughly as many weeks.

"Because people took annual leave to bridge over some of the holidays, business lost momentum and this probably contributed to the rather weak economic performance over the year.

"But in a normal year eight holidays is probably not too many though they could be spaced out a bit better over the year."