Iceland's entrepreneurs and financiers seem to be buying up everything in sight, but in fact, Iceland's total investment in UK plc since the invasion began is rather less than £2bn. Even for such a small country, this is not such a large sum.The idea that Iceland has become a conduit for Russian mafia money, much touted in the City, is little more than fanciful. By providing London with the excuse to regenerate and extend much needed transport infrastructure, it will also help underpin the City's position as the world's leading international financial centre. Today it's widely seen as the California of the South Seas, economically thriving and brimming over with new found self-confidence.With yesterday's decision by the International Olympic Committee, the world's greatest sporting event is finally reunited with the world's greatest city Even for those who loathe sport, that's reason to celebrate. Housebuilders and construction companies were in particular demand.
Even the more international FTSE 100, still languishing deep below its turn of the century peak, achieved a new three-year high.Winning the Olympics is a recognition of how far the British economy has come as well as an opportunity to celebrate and sell to the world all things British - even our food. Before hosting the Olympics in 2000, Australia was to most nations just another far away place, a land of kangaroos, vulgar jokes, beer-soden barbies and waltzing matilda. From sick man of Europe little more than 20 years ago, Britain is already transformed into Europe's most prosperous large economy in terms of GDP per head.The comparison with France's failure to win the games is hard to ignore. For French people, it must seem symptomatic of a nation in decline, a cruelly poignant reminder of cultural and economic self doubt. The games might have given the nation renewed hope, pride and dynamism.
Losing to Britain in this, the anniversary year of the Battle of Trafalgar, is a particularly bitter pill to swallow. France's malaise stands out in sharp contrast against Britain's economic renaissance.As if to celebrate the win, the stock market index of UK economy centric mid-cap companies, the FTSE 250, yesterday hit a new all-time high. So why do I say the economic impact will be considerable?The more significant benefit is of an intangible, unquantifiable variety. It is to do with the feel-good factor, British pride, a sense of optimism and a nation at ease with itself That in itself is a powerful force for growth. Nor is associated capital spending of about £10bn over seven years, mainly on improvements to transport infrastructure, of any more than marginal significance set against annual business investment in the UK of about £120bn.The sums are not to be sneezed at, and there will justifiably be an almighty row if the facilities built turn out to be of no lasting use - for that would amount to a humongous misallocation of capital - but in the round the amounts are too small, even taking account of the boost to tourism, to have much of an impact on growth. A colleague is already making arrangements to be out of the country for the duration. Yet even if you hate sport, or think there already too many tourists in London for its own good, it's hard to quarrel with the promised economic impact, which in the round is likely to be substantially beneficial.Of course, the direct impact is of hardly any significance at all.