December 16th, 2010
06:20 AM GMT
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(CNN) – As Australia nursed its wounds from a humiliating Dec. 7 cricket defeat at the hands of England in the second test of the 2010 Ashes tournament, the nation was soon buoyed by news that unemployment rates fell to 5.2%.

That struck a chord for Andrew Barrelle, a Sydney trader for Merrill Lynch. “I was sitting at my desk last Thursday afternoon when it seemed to click:  Australia started to do poorly in the Ashes since 2005, and it seemed to coincide when our economy started going up,” Barrelle said.

Jumping on his Bloomberg terminal, Barrelle compared UK and Australia unemployment rates to performance at the biennial Ashes test match series – and was shocked by how right his hunch proved: When England does well in the Ashes, unemployment there rises – and vice versa for Australia.

“I was surprised to the extent to which it’s matched, even the volatility matches,” Barrelle said.

So what does this mean? Barrelle estimates that, based on the historical record and current unemployment, England will win the series by 2-0 or 3-1. However, “a 3-0 or 4-0 result would spell real problems for the UK economy – a rise in unemployment by 1-2%,” Barrelle wrote in his subsequent research note.

Also - tongue firmly in cheek - Barrelle recommended “it is in the UK unemployed best interests” that England should take out star players Alastair Cook, Graeme Swann and Kevin Pietersen.

“The UK public should be thanking the bankers and Gordon Brown for their recent ashes success,” Barrelle concluded.

Barrelle’s work joins the pantheon of unusual economic indicators, such as the Super Bowl Indicator (if the team that wins was an original member of the National Football League, the market will go up for the year; if from the old American Football League, the market will go down).

Or the Sports Illustrated Swimsuit Issue Indicator – if the cover model is from the U.S., the S&P 500 will outperform for the year; if the model is non-American, the S&P will underperform. Both indicators, though random, are surprisingly accurate over time.

Does Barrelle think there is a real link between Ashes success and poor economic performance? “I think it’s a coincidence, a bit of fun … but it holds up reasonably well,” Barrelle said.

That could be good news for England as it begins its third test Ashes play in Perth Thursday – UK unemployment rose unexpectedly to 7.9% in the third quarter, government figures showed Wednesday. (True to form, by lunch Thursday Australia was down 4-65).

soundoff (14 Responses)
  1. Basher

    This shows why UK's Job market didi fair better in the past. Better the English loose the ashes or the players might be staring at job boards upon their return.

    December 16, 2010 at 11:44 am |
  2. Andrian Harsono

    To hell with the UK economy, we haven't won The Ashes in Australia for decades. Go England!

    December 16, 2010 at 11:56 am |
  3. Waleed

    Well I think cricket is finally back in England. And England is going to be World Champion in WC-2011.

    December 16, 2010 at 8:56 pm |
  4. Zac

    I wonder how many people would accept a 2% rise in unemployment if it would win England a 4-0 (taking into account the draw) win in Australia.

    December 16, 2010 at 10:56 pm |
  5. Torai

    How do you play cricket?

    December 17, 2010 at 2:34 pm |
  6. Manuel Vilhena

    Strange relation on two distinctive issues.


    December 18, 2010 at 6:42 pm |
  7. kshah

    Oh too bad the British economy shall never be the same again, it shall simply stabilize, infact it has, it shall never be better than this.

    December 19, 2010 at 12:35 am |
  8. Kev of Course

    Would have a lot more credibility if you hadn't manipulated the scales to make England look better ! Anyway, it looks like England unemployment may be ok after all !

    December 22, 2010 at 1:17 am |
  9. Faraz

    Amazing anlysis. When unemployment rate increases more people in England take interests in the game as they have more time and players perform well to secure their jobs.

    So this is simple economics.

    December 23, 2010 at 7:58 am |
  10. Arrogant Aussie Dumb England

    These English team will always tell they gonna win world cup for every world cup. Good to dream, but not day dream. There are two powerful countries vying for world cup. One is South Africa and another one is India. Instead of loose talks just go and take some good rest to see better matches of SA and IND

    January 4, 2011 at 1:23 am |
  11. Vivek Kute

    If anyone wats to understand this scenario, please read " Fooled by Randomness" by Nicolas Nassem Taleb

    January 10, 2011 at 3:02 pm |
  12. Will in OZ

    I would have thought the win by the 'English' cricket team would have had an equal impact on the economy of 'South Africa' where the core of the English team, including their captain, hail from!

    January 15, 2011 at 12:09 am |
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