Will the Instability of the U.K. Economy be worsened by the enormous cost of the Queen Elizabeth II Funeral Procession and the transition in King Charles III’s reign during a crisis?
Written by: Joanna Regita
On Thursday, September 8, 2022, Buckingham Palace officially announced the passing of Elizabeth Alexandra Mary Windsor, better known as Queen Elizabeth II. Queen Elizabeth is the head of the seven independent Commonwealth Realms: the United Kingdom, Canada, Australia, and New Zealand. After a long reign of 70 years since February 6, 1952, the supreme throne will be passed to Prince Charles. He will automatically become King Charles III and head of state of 14 other nations, including Australia, Canada, and New Zealand.
The British economy was already precarious before the late Queen Elizabeth departed. Even the Bank of England has predicted that the U.K. would enter a recession before the end of the year, where shrinkage happens between April and June as energy costs climb. The U.K. economy avoided a recession despite the contraction between April and June because the GDP increased by 0.8% in the year’s first quarter. Based on data from the Office for National Statistics (ONS), the U.K. economy contracted 0.1 percent in the second quarter of this year.
A significant, pervasive, and protracted decline in economic activity is referred to as a recession. A recession is often defined as two-quarters of declining gross domestic product (GDP). Economic output, consumer demand, and employment all often experience reductions during recessions. On the other hand, the National Bureau of Economic Research (NBER) defined it as a contraction of the economy that begins at the height of the expansion and ends at the lowest point of the subsequent downturn. Meanwhile, the challenge of rising living costs in the United Kingdom is worsening the country’s crisis. Sadly, many people are willing to cut back on their food intake to pay their astronomical electrical costs. 10.9 million U.K. adults, or 20% of the population, have unpaid electricity bills, according to a Money Advice Trust survey. This number has increased by three million, or nearly 45%, since March 2022. Furthermore, due to the problem in the cost of living, 5.6 million people have been willing to skip meals over the past three months. Even the electricity rates are gradually rising. Britain’s energy regulator announced it would raise 80% of the primary limit on electricity bills to consumers by October 2022. The electricity bill will rise from the previous £1,971 per year, and the average will be £3,549 per year. The transport sector in the U.K. is also in danger of ‘ near death.’ How not? More than 2,000 bus drivers in London and their 600 staff in Kent plan to go on strike next week.
Moreover, the worsening cost of living crisis in the U.K. has prompted workers in the rail industry, airlines, lawyers, and even union staff to go on strike. The increased cost of living has also made many women enter prostitution. Citing data from the English Collective of Prostitution, the number of women who become commercial sex workers (CSWs) increased by 1/3 of the usual rate due to the high cost of living. This condition also increases the number of homeless people in the U.K. The number of people in the U.K. that were homeless or in danger of becoming homeless in the first quarter of this year increased by 5.4% from the previous year, which is 74,230 households.
Therefore, do not be shocked that, following Queen Elizabeth II’s death, the British economy deteriorated further. Analysts predicted it would slow economic expansion and bring Britain closer than anticipated to a recession. The monarch’s death could also further slow an economy weakened by double-digit inflation, risk of recession, numerous strikes, and a fall in sterling. Pantheon predicts that the Queen’s funeral will reduce the U.K. GDP by 0.2% in September 2022 (Apetorgbor, 2022).
In addition, the economic impact after the Queen’s death will be exacerbated by the anniversary of the Queen’s death. This is reinforced by an extended holiday due to a day of national mourning for ten days. People worldwide will be grieving with the Royal Family, according to the Outkick website, and, understandably, the Queen’s funeral may cost up to billions of British pounds. After the death of Queen Elizabeth II, there were rumors that Britain would celebrate ten days of national mourning, during which several events would take place. Four days would pass while the Queen’s body was in Westminster Hall for people to offer services. Then, before the funeral service at Westminster Abbey, the coffin will be available to the public for 23 hours each day. While others can watch the funeral procession on television, up to 2,000 specially invited visitors will witness Queen Elizabeth II’s funeral live.
It is also well known that Buckingham Palace spent years preparing for the Queen’s passing and had two different arrangements prepared before Queen Elizabeth II passed away. Although the price of Queen Elizabeth II’s burial will not be disclosed, it will be expensive. According to reports, if the funeral and coronation process is carried out, it will cost up to 6 billion pounds, or around Rp. 103 trillion. (Landhiani, 2022)
The Outkick website noted that the passing of Queen Elizabeth II undoubtedly affected England’s finances. This is because most companies will be closed during the funeral procession, the Premier League will postpone all of its games for the next three days, and the day of the funeral will be a public holiday in all of England. In less than two weeks, the U.K. stock markets will close for the second time. Yet, there were many holidays due to mourning and the Queen’s funeral processions. The Queen’s death certainly did not harm the state of the British economy because this historic event will also increase British tourism. As (Danni Hewson, 2022) estimates, the Queen’s funeral procession will cost the U.K. economy £2.3 billion. However, tourism will likely increase as foreign nationals travel to give and experience this piece of history.
To conclude, The death of Queen Elizabeth II would be extremely costly to the British economy due to bank holidays, funeral costs, and King Charles II’s coronation. King Charles III’s reign should be commemorated as soon as possible by printing new British coinage with his image on the back and altering postage stamps, passports, and police uniforms. Regardless, it is estimated that the U.K. will still survive the crisis because the tourism industry has a good impact on helping the U.K. improve its economic stability.
Joanna Regita is a member of the Marketing division of FPCI UGM. This article represents her own views and not necessarily those of FPCI UGM
References
Apetogbor, C. (2022). How Queen Elizabeth II’s death could impact the UK economy. Retrieved 21 September 2022, from https://www.lemonde.fr/en/economy/article/2022/09/13/how-queen-elizabeth-s-death-could-impact-the-british-economy_5996722_19.html
Anderson, S., & Eichler, R. (2022). Recession: Meaning in Economics With Causes. Retrieved 21 September 2022, from https://www.investopedia.com/terms/r/recession.asp
Zuraya, N. (2022). Ekonomi Inggris Semakin Mendekat ke Resesi |Republika Online. Retrieved 20 September 2022, from https://www.republika.co.id/berita/rgj30z383/ekonomi-inggris-semakin-mendekat-ke-resesi
Landhiani, J. (2022). Ternyata Segini Biaya Pemakaman Ratu Elizabeth II. Retrieved 21 September 2022, from https://www.trenasia.com/ternyata-segini-biaya-pemakaman-ratu-elizabeth-ii
