Worries about the global economy and violence across the world have turned the celebration of Christmas into a more sombre affair this year, Queen Elizabeth said on Thursday.
Britain, like many other developed nations, is facing the risk of a prolonged recession. Unemployment is rising fast, household high street firms are collapsing and several big banks are only able to stay in business with government help.
There has also been an increase in the number of British soldiers killed in Afghanistan in recent weeks, just as troops in Iraq prepare to come home next year.
"Christmas is a time for celebration, but this year it is a more sombre occasion for many," the Queen said.
"People are touched by events which have their roots far across the world. Whether it is the global economy or violence in a distant land, the effects can be keenly felt at home."
But, in her annual Christmas broadcast which dates back to 1957 and is watched by millions across Britain and the Commonwealth, the 82-year-old said those with courage would work hard to survive and improve their lot.
"When life seems hard the courageous do not lie down and accept defeat; instead they are all the more determined to struggle for a better future," she said, standing by a piano adorned with pictures of her family.
This year has been eventful for the royal family, with Prince Harry, third in line to the throne, fighting the Taliban in Afghanistan for 10 weeks, an inquest into the death of Princess Diana and Prince Charles' 60th birthday.
The Queen paid tribute to Britain's armed forces but also singled out for praise her eldest son and heir, Charles, accompanied by previously unseen footage of the prince playing with his mother as a small child.
"We feel great pride in seeing our family make their own unique contributions to society," she said. "Through his charities, the Prince of Wales has worked to support young people and other causes for the benefit of the wider community."
