U.K.'s Royal Family Hit by Inflation

LONDON, June 27, 2008 — -- Not even Queen Elizabeth II is immune to the effects of inflation.

Buckingham Palace released its annual accounts today, showing an increase of nearly $4 million in the Queen's spending.

So how much does it cost to keep Britain's monarch in business? A cool $79.5 million.

That seems like a lot of money until one considers that the Queen and the royal family cost British taxpayers $1.30 per person.

Still, in a time when housing prices are falling and most people are facing financial pressures in the U.K., every little bit counts.

And critics of the royal family are wondering if it's wise to spend millions on one family when so many other families are battling rising costs on everything from food to fuel.

"Well, what you make of this amount depends on whether you are a republican or a royalist, doesn't it?" Camilla Tominey, royal editor of the British tabloid The Sunday Express, told ABC News.

"The royals often argue that they are cheap," Tominey said. "When you think of the money they bring in, in terms of tourism, the number of visitors who come to the U.K. to see the palaces and so on, it does seem like good value for money."

This year, though, it was the Queen's own tours that cost the taxpayers money. Indeed, the amount spent on royal travel rose by nearly $1.2 million to $12.3 million last year.

Her most expensive engagement?

The state visit to America last May to commemorate the 400th anniversary of the Jamestown settlement, which cost a reported $824,000. A chartered plane for the trip totaled nearly $760,000.

Now, with fuel prices rising fast — the cost of a barrel of oil hit a record high of $142 today — such trips may have to be reconsidered.

In a statement released today, Sir Alan Reid, Keeper of the Privy Purse (who's also responsible for the management of the Queen's financial affairs), said that "expenditure on royal travel […] also increased in response to the number of overseas visits undertaken at the request of the Foreign and Commonwealth Office and U.K. Trade and Investment."