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The royal recession: Queen hit by credit crunch
Hugo Duncan and Sri Carmichael27.06.08
The Queen has been hit by soaring prices as Britain stands on the brink of recession, new figures show today.
Official statistics showed the economy grew by only 0.3 in the first three months of the year. It was the slowest rate of expansion for three years and was met with shock in the City where experts said there was now a chance of an economic collapse.
Recession is defined as two successive quarters of financial decline - not seen in Britain since the early Nineties.
The figures were published as the Queen was revealed to have been hit by costs soaring by nearly twice the official rate of inflation and her budget being frozen. Accounts from Buckingham Palace show the bill for running the monarchy soared by 5.3 per cent to £40 million last year.
In a further blow, the oil price hit a new high as it soared past $142 a barrel, raising fears of even higher petrol prices.
The Land Registry reported that house prices are 1.8 per cent lower than a year ago. Experts expect prices to fall by as much as 25 per cent by the end of next year. The unexpected downgrade and grim forecasts from the City will send a shiver through Downing Street on Mr Brown's first anniversary in No 10.
Jonathan Loynes, chief European economist at Capital Economics, said the latest blizzard of economic news painted "a pretty worrying picture" for Britain. He said there was "a very real chance of a technical recession".
Inflation is also well above the three per cent target at 3.3 per cent - and likely to rise above four per cent this summer. Millions are already struggling to deal with the rising cost of mortgages, fuel and food.
Howard Archer, chief UK economist at Global Insight, said: "There is undeniably a very real, and growing danger that the economy could suffer a mild recession."
The usually upbeat Philip Shaw, of Investec Securities, said: "Today's figures open up the possibility that growth will continue to weaken from a lower base, and although we take the view that the economy will avoid recession, our confidence is ebbing."
The gross domestic product figures were revised downwards after a late flurry of weak data from the services sector, the driving force of the British economy. It includes financial services as well as hotels, restaurants and bars.
The slowdown is set to hit corporate profits and therefore tax returns, leaving the Government in the disastrous position of having to raise taxes or cut spending in the build-up to an election, likely in 2010.
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In response to claims that the royals earn Britain millions of pounds in tourism, Republic notes that only one royal residence, Windsor Castle, features in the UK's top 20 tourist attractions - at number 17, while Windsor Legoland is at number 7: “Indeed, the success of the Tower of London (number 6) suggests that tourism would benefit if Buckingham Palace and Windsor castle were vacated by the Windsor family.”
- Henry Richmond, Sussex, UK.
Ahmed,
I refer to your ill advised comments of 27/06/08, in terms of the net gain royal tourism, generates for UK PLC.
I refer you to one CBI estimate conducted in 2007 that tourism generates estimates over £75BN to the Exchequer (Financial year 2007) which any objective sober person would find difficult to make case that the £40million in maintaining the royal list would represent bad value even for less than 1% of this total.
In short I suspect you submitted your comment under a different agenda. Of course as this is a democracy I question what your agenda is...If you can be bothered to reply of course.
- Paul Moloney, New Malden
What does she care how much her bills go up? We are all so stupid we'll pay anything for them; they really must laugh at us all around their richly served dinner table.
- Mikko Takala, Drumnadrochit, Scotland
