Prince William and Kate Middleton have now announced the day for their wedding – 29th April 2011. How will the royal wedding impact on the UK economy? Well, the wedding will certainly cost a good deal of money. The cost of the service in Westminster Abbey and the reception will be met by the Royal Family. They will also pay for the honeymoon, despite the Middletons offering to cover some of the estimated £12m. cost. However, the security on the route and in London, over those few days, will cost an extra £5 million – a lot of this will be because the large numbers of police working on the wedding day will be getting extra pay for working on a bank holiday. On top of the £5 million estimated cost for the Metropolitan police, other security agencies will suffer increased costs as well – the transport police for marshalling people into and out of London and the border agencies with the increased traffic of tourists in to see the wedding and citizens out to avoid it. Then there is the cost of the bank holiday. Current estimates put the cost of a lost day of production and earning at around £5 billion. So, is it all going to make the current UK financial crisis worse? Not necessarily. There are a number of benefits that we will also see. We will be likely to get an influx of tourists into the UK to see the wedding and to be in the UK at the historic time. According to Visit Britain, this could bring in at least £500 million. On top of that we will see increased sales in many items of memorabilia – mugs, tea towels and so on. Whilst this may do good for the Chinese and other Asian markets, it will also be of benefit to economy. However, it is not clear that these added benefits will overcome the £5 billion plus cost. What may make the difference is the possibility that the ‘good will’ in the UK will improve our economic productivity. How likely is this? Well we can look at Royal weddings in history to see whether or not they have had a positive impact. Since 1955, the UK economy has grown at an average of 0.58% per quarter. In Q2 of 1960 Princess Margaret marries Anthony Armstong-Jones. Sadly this did not seem to have a good impact on the UK economy, as it actually shrank by over 1% in the quarter of that wedding. The same story was repeated when Princess Anne married Captain Mark Phillips in 1973. On this occasion the economy shrank by -0.17%. Much more success was found when Charles married Diana in 1983. In that quarter, the UK economy grew by 1.36%. However, the trend did not continue. Prince Andrew’s wedding to Fergie in 1986 at least saw the economy grow, but only by 0.55% – hardly evidence of a good will bounce. In 1992 Princess Anne got married again, this time seeing another 0.55% increase in the economy. Prince Edward could not improve things in 1999 when he married Sophie Rhys-Jones with an increase of 0.52% in the economy. However Charles was able to turn the trend around when he married Camilla Parker-Bowles in 2005 and saw the economy increase by 0.72%, which is just above average. What about other Royal events? Well the Queen’s Silver and Golden Jubilees did not see much of a bounce either at only 0.16% in 1977 and 0.39% in 2002. So what are we to conclude from this? Well the only Royal events that seem to have had a positive impact on the economy seem to be weddings involving Charles. Perhaps it is possible that, with William being the next heir to the throne, he will also inherit his father’s ability to bounce the economy… .
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