Foiled UK bomb plot won't hit UK economy

LONDON, Aug 10 (Reuters) Britain's trillion-pound economy will feel barely any impact from today's bomb alert at London's Heathrow airport that stranded thousands at the peak of the summer holiday season, experts predicted.

British police said they foiled an attempt to blow up aircraft in mid-flight between Britain and the United States, causing chaos at airports around the country as flights were cancelled and drastic security measures were brought in.

Share prices of European airlines took a pummeling but an early sell-off in the pound and rally in bond markets proved short-lived as analysts judged there was unlikely to be any lasting impact on economic growth.

''Could the foiled plot to blow up transatlantic flights leaving the UK have any discernible economic impact? We believe the short answer is: probably not,'' said Holger Schmieding, economist at Bank of America.

''Consumers and business people are unlikely to change their travel and spending habits by enough to affect the macro data for long.'' That's as long as things quickly get back to normal. Maurice Fitzpatrick, business analyst at Grant Thornton, said that if travel to the UK becomes increasingly difficult, the situation could turn worse.

''It is not impossible to envisage north of 100 million pounds a day lost for the UK economy,'' he said.

Tourism and retail spending are likely to be the victims of any fallout if security fears keep people from travelling.

August is by far the biggest month for visitors to the UK or for Britons travelling abroad.

''There could clearly be some economic impact, with the transport and tourism sectors a particular concern, but it is far too early to know what the effect will be,'' said Richard Lambert, the head of Britain's biggest business lobby group.

But while industry groups were bracing for the immediate impact, the general perception was that spending would quickly bounce back, much as it did after the July 7 bombs in London last year.

Visit Britain -- the UK tourist board -- estimates that last year's attacks, which killed 52 people and injured 700, cost the industry some 750 million pounds, less than 0.1 per cent of total economic output.

''There is bound to be some disruption but the evidence of last summer suggests it could be short-lived,'' said Tony Travers, director of the Greater London Group of researchers at the London School of Economics.

Security scares have just become a part of life almost everywhere. UK travel agents, while reporting an increase in queries to their call centres, said many travellers were simply looking to rearrange their flights rather than cancel them.

''It's just part of travel today. It's just something you have to do and there's always a risk, and if they're increasing security this much, we're probably safer than usual,'' said Dale Rosser, 57, queuing at Heathrow to fly back to Michigan.

REUTERS MQA KP2113