Details: William, Kate plan royal wedding

"However, given his seniority, you can expect formal or ceremonial elements," he said.

The cost of the event could come from the annual 7.9 million pounds ($11.6 million) of government funding given to Queen Elizabeth II's royal household to pay for salaries and official functions, or from her own personal wealth.

At the very least, taxpayers will have to pay for the costs of security, with a large number of police needed.

There will, however, be a boost to the British bottom line. Travel group Visit Britain said the monarchy generated 500 million pounds ($800 million) a year for the economy from overseas tourists, adding "the benefit of a royal wedding year is likely to outstrip that."

Prime Minister David Cameron led lawmakers in the House of Commons on Wednesday in congratulating the couple on their "wonderful news."

"We look forward to the wedding itself with excitement and anticipation," Cameron said. President Barack Obama also wished the couple well, White House spokesman Robert Gibbs said.

The biggest fashion decision Middleton faces will be her wedding dress.

Deborah Joseph, editor of Brides Magazine, said Middleton will face substantial pressure to choose an English designer.

"It's a British royal wedding, there's no need to look abroad," said Joseph. "She may give a nod to Princess Diana, and use one of her designers, like Bruce Oldfield or Amanda Wakeley, or she may make a statement of her own."

Joseph said Middleton's decision could define bridal wear for the next decade, much as Diana's 1981 outfit became the most-copied wedding dress in history. One easy bet, however: Middleton is likely to use much softer fabric, like tulle or organza, than the stiff taffeta Diana used.

The British media feasted on the announcement. Commentators dredged up memories of the dazzling nuptials of Charles and Diana and newspapers splashed pictures of Kate and William across their front pages. "The New Romantics," said The Times of London, while several papers noted that William had given his betrothed his mother's engagement ring. "With Mummy's ring I thee wed," said The Sun.

Younger brother Prince Harry said he was "delighted that my brother has popped the question!" — and adding that Kate was the sister he had always wanted.