How Will the Death of Queen Elizabeth Impact the UK’s Economy?

Queen Elizabeth ll, our longest reigning monarch, died on Thursday 8th September 2022 at Balmoral, Scotland. Her death signals the end of an era for the British monarchy and the world is mourning, but will her passing come at a cost for the UK economy, and will it be the final dagger that leads us into a recession? 

The Cost of Queen Elizabeth’s Death 

The Death of our Queen has triggered a chain of events that will cost the economy billions. It has been estimated that the funeral, Charle’s coronation and the additional bank holiday will cost the UK taxpayers more than £6 Billion, amidst the cost-of-living crisis. 

• Funeral Ceremony
  
  When The Queen Mother’s died in 2002, it cost around £5.4 million. When Princess Diana Died, it cost between £3 and £5 million. Queen Elizabeths, on the other hand, is forecasted to cost more than £7.5 million. 

• King Charles’ Coronation
  
  It has been said that Charles has plans to hold a ‘cost-of-living coronation’ in 2023, in a bid to cut costs. However, when Elizabeth was crowned 69 years ago, it cost £1.57 million, the equivalent of £46 million today. We cannot yet predict what the final bill will be, but we can confidently assume it’ll be tens of millions. 

• Extra Bank Holiday
  
  Whilst they provide a well-needed break for workers across the country, Bank holidays come at a huge price to businesses and the economy. Closures cost the UK on average £2.3 Billion, which equates to £19 Billion per year. The two additional Bank holidays, including that given for the Jubilee, push this total well over £20 Billion.
  
  The aftermath of the jubilee bank holiday caused a 0.6% decrease in gross domestic profit. Now, Chief UK economist at Pantheon Macroeconomics, Samuel Tombs, has warned that the funeral bank holiday will impact the September GDP by 0.2% and may push us into a technical recession (defined as two-quarters of declining GDP).

• Miscellaneous expenses
  
  Since 1952, Elizabeth’s face has been printed on our currency, postage stamps, and passports. Following her death and Charles’ succession, all government-issued items depicting the Queen’s face will have to be reprinted and produced to depict our new King. This will come at a massive cost. To further this huge expense, many uniforms worn by military personnel and police officers, cyphering the Queen, will also be replaced. This also includes all police and military gear sporting the Queen’s regnal number and initials. 

10-Day Mourning Period 

Prime Minister Liz Truss recently announced plans to help British households and businesses with soaring energy costs. This aid package will include a two-year freeze on energy prices for people and a six-month freeze for public institutions and businesses and is estimated to cost up to £150 Billion. 

When Elizabeth died, British institutions were put on hold for a 10-day mourning period in honour of the late Queen. However, the delay in implementing support packages for the public and businesses will have a damaging effect on those in need of support, with inflation surpassing 10% (for the first time since the 1980s) and energy prices remaining unaffordable. 

Will the Commonwealth fall apart?

The Commonwealth is made up of 56 ‘equal and independent countries’  some that were once part of the British Empire and others that chose to join. Elizabeth was the face of the organisation, but her unwavering dedication to promoting peace and unity seemed to shadow the Commonwealth’s bloody, colonial past. But now that she has died, will repressed tension rise to the surface?

The death of the Queen sparks the end of many ties to the Commonwealth. Already, several countries, including Australia and Canada, are debating severing ties with the UK. But what does this mean for the economy? 

The Commonwealth has contributed to trade, investment & immigration in the UK for decades. If countries start to break away, it may have a long-lasting impact on our ability to trade, and its cost. 

Britain’s reputation was tarnished after our departure from the EU. It was a laughing stock. The Commonwealth provides one last slither of stability and global influence for the UK. This poses the question, who and what will we have left if it dissipates?

Will the UK lose its Soft Power?

Britain’s soft power hangs in the balance following the Queen’s passing.

Despite a decline in global power following the downsizing of the military and its diminishing economy, the Queen helped maintain the UK’s influence in the world. For the past 70 years, the Queen has charmed many world leaders and acted as The UK’s most important diplomatic representative. She achieved this by remaining neutral, undergoing diplomatic visits and creating foreign relations. But can Charles step into her shoes? 

The role of the Royal Family 

Yet another benefactor of Elizabeth’s soft power has been the UK economy. It is estimated that each year, the Royal Family brings in more than £19 billion through tourism, but will this change following her death? 

The Royal Family as a brand is worth a staggering £91 billion, ranking it fourth in the world. However, it is suggested that the monarchy will lose some relevance following her passing. It is reported that King Charles lll has plans to modernise the monarchy, which could spark a rise in support.

“She is the face of the British monarchy at the end of the day. When you say the words, ‘the royal family’, she is the first figure that comes to mind,”

– Lesley Keyter

A less popular monarch, or is he?

Over the years, Charles has been praised for speaking out on issues including the environment and wildlife conservations and supporting various charities. However, he has been criticised for his controversial behaviour and comments made over the years and has been ranked the seventh most popular royal in a recent YouGov poll, and 12th by Millenials. 

When Charle’s infidelity came to light whilst married to the beloved Princess Diana, the world was outraged and his reputation has never fully recovered. In more recent years, he has been criticised for comments made by Prince Harry during his interview with Oprah, claiming his father stopped taking his calls in early 2020. When asked who should be the next King, half of Britons voted for William in a poll earlier this year. 

However, since he took his place on the thrown, his popularity is said to have risen. A recent poll has shown that 63% of Britons believe he will be a good king, a 24-point rise since march. But will this newfound support extend overseas? And will he continue to attract the same level of tourism as his mother?

At this moment in time, it’s difficult to predict whether Charle’s ascension to the throne will tarnish the Royal Family’s appeal, or if it’ll affect tourism in the UK. But what we do know is, that the economy is hanging by a thread, and the passing of Britain’s most beloved monarch will cause more than just heartache, it’ll lead to a recession and an increasingly uncertain future. 

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