Since the global credit crunch took a hold in the UK in the late summer of last year, there has been growing concerns over the state of the economy. Consumers were already facing financial difficulties as the result of five interest rate rises between August 2006 and July 2007, and consumer confidence levels had already fallen as a result of financial woes, which were affecting the economy. However, the global credit crunch brought with it a whole host of new problems, making it increasingly difficult for consumers to sort out their finances as a result of tighter credit conditions that lenders put in place.

The US Federal Reserve has already slashed its interest rates by a huge amount over the last six months, taking the base rate from 5.25% to 2.25% with rate cuts amounting to a massive 3% in order to try and stave off recession. The Bank of England has cut rates twice since December, and although another rate cut is expected in April the central bank has made it clear that it will not be taking the same radical steps as the US Federal Reserve. Whilst some industry experts state that the economy in the UK is nowhere near as bad as the state of the economy in the US, a recent move by the Queen could indicate that all is not well.

According to a recent report the Queen has cancelled a party that was to be thrown for her diamond wedding anniversary, stating that it would be in bad taste with the country on the brink of recession. Sources close to the Queen have said that she realised that throwing a lavish party would be insensitive in the current financial climate, even though the party was apparently going to be funded by friends of the Royal couple.

A friend of the Queen and Prince Philip was reported to have said: ‘It is a great shame, but the Queen does not want to be seen to be doing something so elaborate at a time of such economic gloom. The Queen decided to cancel the party because of the very real prospect that the country is about to go through a major recession. The Queen does not want to be seen to be accused of being extravagant when everyone else is worrying about their finances. There has been a lot of talk since December that everyone in Britain is tightening their belts. With that in mind, the Queen felt that it would be entirely inappropriate to throw a party on a day that wasn’t even her actual wedding anniversary.’

The Queen’s decision, and the remarks of the close source, has fuelled speculation that the country may be closer to recession than many had thought, although industry professionals still state that the situation is not on par with that in the United States, hence the decision of the Bank of England not to cut interest rates dramatically. However, the governor of the Bank of England has stated that an April cut is now more likely as a result of tighter credit conditions.

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