How England's loss could cost the UK billions

England's loss could prove costly for the British economy. Photo / Getty

England's 33-13 Rugby World Cup defeat at the hands of Australia this morning could have massive ramifications outside of rugby.

The loss - which sees England become the first host to be knocked out of the Rugby World Cup in pool play - could cost £3 billion to the United Kingdom economy, and be detrimental to the UK's biggest companies.

How? A study by the London Business School says that host elimination from major sporting tournaments can have a big impact on the stock market.

Speaking to the Independent, Professor Alex Edmans notes that "A lost competition can have a profoundly negative effect on investor mood." This hypothesis has been made after observation of similar trends in England, France, Germany, Italy, Spain, Argentina and Brazil - largely after football losses at major tournaments.

"A rugby loss leads to a next-day decline of 0.15 per cent, which is roughly £3 billion when applied to the UK stock market," said Edmans.

There could also be big financial losses for host broadcaster ITV, who paid £60 million for the rights to broadcast the Rugby World Cup. With England out the tournament, The Independent claims the value of its advertising slots could plummet by more than £1 million per match.

Losses to pubs, restaurants and shops could also reach tens of millions.

One part of the UK who won't be so worried about economic losses is Wales - who as a result of England's loss have secured themselves a spot in the World Cup quarterfinals.