Credit crunch and economic downturn in London has affected Diwali festivities with people of Indian origin buying less gold and jewellery for the occasion as compared to previous years.

The festivities in London are reputed to be the largest outside India.

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On Sunday, Indian-origin Lord Mayor Manjula Sood led the switching-on ceremony of Diwali lights along the Belgrave Road in Leicester, a hub of Asian cultural and business activities

The road is also called the Golden Mile due to a large number of shops selling gold and jewellery, mainly to an Asian clientele.

However, this year the shops have recorded almost a 50 per cent drop in sales.

"We noticed the recession about eight months ago and I think our trade is down this year by at least 50 per cent," a local trader Alpesh Dana said.

"Every year, we seem to be getting more and more people coming to Leicester to see Diwali lighting," chairman of the Diwali Working Party, Councillor Vijay Patel, said.

"We have similar celebrations in Mauritius, Malaysia, Singapore but the one in this country, the one in Leicester, is the biggest by all means," Patel said.

However, local residents say that this year the festivities are on a low key due to the credit crunch and many people losing jobs.

"People used to buy a lot of gold just before Diwali but gold price is so high this year that many people are not celebrating Diwali as they would," a resident of Belgrave Road Alka Patel said.

Thousands of people turned up on Sunday to witness the switching-on ceremony that featured more than 1,000 metres of light displays which was followed by fireworks.