Update II: Is football coming home? - Economics Observatory

Following last night’s victory over Germany at Wembley, England’s chances of lifting the trophy on 11 July have improved dramatically – but they’re still only 21%. Tough matches lie ahead, and ‘score-casting’ results in the knock-out stages remains difficult.

Since 1996, England fans have sung ‘It’s coming home’ with varying degrees of sarcasm, hope and despair. In 1996, an unexpected run to the semi-finals saw one of England’s many unsuccessful run-ins with Germany since 1966, the last time England actually beat the German team in a tournament knock-out match.

This history meant that when the Euro 2020 draw was scrutinised, and it became clear that a last-16 tie of England against Germany at Wembley was likely, tensions began to mount. When Group F’s tumultuous finale came to a conclusion last Wednesday, the England versus Germany match-up was confirmed.

It seems hard to imagine that productivity levels in England have been particularly high in the last week, in particular yesterday during the build-up to the match. While high-value TV advertisement deals, surging merchandise sales and packed out pubs may benefit some industries, it’s not clear whether football is all that good a thing for the economy. For one thing, it leads to stock market traders being distracted – and, according to economic research, even the highs of seeing your team win don’t outweigh the lows of defeats.

But there has been a win this time: England did indeed end their 55-year wait to beat Germany in a knock-out match. Incredibly, it’s also only the team’s fifth knock-out win in 90 minutes since 1966.

A truly momentous event, and a huge national distraction. And it followed on from the high-scoring distractions of the previous day, when world champions France were eliminated on penalties by Switzerland, and Spain were pushed all the way by Croatia. Whether all this sporting drama hampered wider economic activity or stimulated consumer spending remains to be seen.

So far, we have been putting out forecasts for the tournament at each stage. It is fitting to do so again now that the round of 16 matches have concluded. Our method is quite simple: we model the goal scoring of teams historically, based on their team strengths according to the well-used Elo-rating methodology. We simulate match outcomes for the remainder of the tournament 10,000 times and look at how often particular outcomes occur.

With just eight teams remaining in the competition, the probabilities begin to look quite different from before – especially as France, who had an 18% chance of winning before the last 16, and the Netherlands at 7%, have exited. Unsurprisingly, Belgium remain our favourites, with a 39% chance of winning the competition.

Nestled just behind them, on 21%, is England. This means that there is still a 79% chance that football won’t be coming home. But England benefit from being on the relatively easier side of the draw, which is why their 21% chance is much higher than that of Italy (15%) and Spain (13%), both of whom will have to battle it out with Belgium to reach the final. Based on our model, the most likely pairings for the semi-finals are Belgium versus Spain and England versus Denmark. There’s an 18% chance of this happening.

England’s side of the draw may be easier, but it is far from a done deal. There is still a 46% chance that England will not make the final. This means that England only have a 50/50 chance of getting to what would be only their second major tournament final.

As discussed in previous articles, knock-out football is rife with uncertainty. Yesterday evening, England’s quarter-final opponents, Ukraine, benefitted from a contentious red card to beat Sweden in the dying seconds of the match – football is full of unpredictable events, and upsets frequently happen. And after the next round, the probabilities for each team winning the tournament will, of course, change again. Fans in England have reason to be hopeful but should be wary of the challenges ahead.

Table 1: Probability of reaching each stage of Euro 2020, by team in the quarter-finals

Team	Champions	Final	Semi-finals	Champions (pre-tournament odds)
Belgium	38.6	50.1	66.0	24.02
England	20.6	53.9	70.7	7.29
Italy	14.8	22.7	34.0	8.81
Spain	13.1	22.7	62.5	11.92
Denmark	5.4	20.8	59.2	4.67
Ukraine	3.0	16.4	29.3	1.0
Switzerland	2.9	6.5	37.5	1.46
Czech Republic	1.4	9.0	40.8	0.13