Windsor, the country town from which Britain’s Royal family takes its name, will tomorrow host the royal wedding of Prince Harry, son of the heir to the throne Prince Charles and the late Princess Diana, and the actress Meghan Markle.
But as the happy couple are joined in St George’s Chapel, what lessons can be learned from history in terms of any impact on the investment climate and UK economy? In other words, is there a “Royal wedding effect” on stock markets?
The FTSE 100 Index had not yet been launched at that time.
Dot-com stocks salute Edward and Sophie
That is not a bad performance for a 12-month period that opened with the economy in recession, saw rioting in British cities and recorded permanent opinion-poll leads for an anti-business Labour Party.
In the balmier economic climate of that year, a strong stock-market performance was perhaps to be expected, although 1986 had its fair share of crises, including the huge row over the future of aerospace company Westland that split the British Cabinet.
Given markets were caught up in the “dot-com” boom in high-tech stocks, perhaps the nuptials of the Earl and Countess of Wessex played only a secondary role in bolstering investor sentiment. On the other hand, maybe the happy couple took traders’ minds off the scare of the moment, the “Millennium Bug” that was feared to crash the financial world’s computers at the stroke of midnight on December 31.
Royal magic cannot dispel serious gloom
Twelve years later, in 2011, Prince William and Catherine Middleton married, becoming the Duke and Duchess of Cambridge.
However, given that the west was still in the grip of the Great Recession, it is perhaps a little hard to blame Kate and William for this disappointing performance.
Indeed, history tells us that the most severe crises are immune to the magic of a Royal wedding and its impact. The first of the Queen’s children to marry was Princess Anne, walking down the aisle with Captain Mark Phillips in 1973, the year of the energy crisis, industrial strife in Britain and a Middle East war.
The FTSE All-Share Index opened at 218.8, inched up to a high of 219.02 and ended 1973 at 149.76, not far off its low for the year of 134.36.