Come 2012, the eyes of the world will be on London as it plays host to the Olympic Games. Speaking at the 2008 CBI Business Summit this morning, Lloyds TSB's chief economist Trevor Williams says the economic impact will be "priceless" for the country and small businesses.

In exactly 1,506 days, London will be the centre of the world's attention. With more than £10bn of contracts up for grabs, the 2012 Games is the biggest procurement opportunity this country has ever seen.

"Economics is a dismal science. But I'm not here to be dismal," said Williams. "The Olympics is a huge event and the impact of the event on this country will be priceless."

While Williams reels off important stats and figures about the Games, namely that the event will boost the UK's GDP by a whopping £20bn (that's a quarter of a percentage point each year in the build up to the Olympics) and that over 60 per cent of contracts have already been awarded to small businesses, many of the benefits are intangible.

"The input/output model that we use to calculate the economic benefits doesn't take into account elements such as local authorities spending more on roads or the renovation of buildings in local areas," he said. "Plus there will be massive legacy effects: better transport links in south-east London, improved sewage, infrastructure and education facilities."

Williams doesn't think that inflation and the recent credit crisis will have a knock-on effect on the Games. "The only impact of the credit crisis on the real economy is that it's harder to get funding. The effects have been minimal and over-exaggerated. However, inflation must be kept low and stable. The government mustn't fall into the trap of making a huge policy mistake.

"Will there be a recession in the UK? No. We will muddle through and this country will continue to grow."

Describing the 2012 Games as "shots of adrenaline into the economy", Williams says it's not just the construction sector that will reap the rewards. "All sectors from publishing and security through to food and hotels will prosper."

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