Diana 1961-1997: The legacy - Death to affect British economy

The passing of Diana, Princess of Wales, has left the nation emotionally impoverished. More prosaically, even the British economy is likely to be adversely affected by her death.

The Centre for Economics and Business Research says today that sharply reduced spending on entertainments, visits to leisure attractions and sporting events in the past week could lead to retail sales figures in September nearly 1 per cent lower than expected.

Traffic congestion in central London over the past week, as mourners converged on the Royal palaces to pay their respects, will probably have reduced business productivity too. Net gross domestic product for the third quarter of the year is likely to be down by nearly pounds 200m, or 0.1 per cent.

On the other side of the coin, expenditure on flowers and other mementoes will have benefited the economy, and extra tourism revenue will have been generated by the thousands of people visiting London for Saturday's funeral.

The CEBR predicts an eventual "Graceland effect", with London and other areas associated with the Princess attracting crowds of visitors in the same way that Memphis, Tennessee, draws disciples of Elvis Presley.

But the "Diana effect" is likely to be on an even bigger scale, the centre says, as sales of memorabilia build up.