Down at the corner, the Red Lion, our neighborhood local, has stretched red, white and blue pennants over the beer drinkers in the concrete garden. J. Francis and Son, the "Family Butcher," is packing his pork cuflets, chops and beef in plastic bags emblazoned with the Union Jack surmounted with the silver crown symbol of the Jubilee, Elizabeth Street, our shopping street, is canopied with pennants in the national colors. At the Gerard Sheet station house, our bobbies have all been invited to the Chester Sheet block party a week from Sturday - Children's games in the afternoon and, for the grownups, dancing outdoors to tapes in the evening.

This is typical of how much of Britain is celebrating the 25th anniversary of the queen's accession to the throne. The country's bigger and more aggressive shopkeepers, however, are finding more concrete reasons for joy. They are merchanising the queen and her Jubliee for all they are worth and even a bit more.

Portraits of Queen Elizabeth and Prince Philip, the crown and the Union Jack have been painted, sculpted, carved, printed, stitched and engraved on everything from chamber pots to bed spreads, from pillow cases to brassieres.

Children can suck 14-cent red, white and blue "Jubilee" lollipops, inscribe their names for 79 cents over plastic Union Jack bicycle plates and play with a toy queen and Philip in a toy coach at $9.46. Their parents can cherish a Wedgewood bust of the queen for $1.29 or wear a pair of $1.72 nylon stretch briefs printed with the Jubilee crown emblem.

The selling of the queen this spring is expected to make retailers' cash registers ring louder and more often than bow bells. Harry Shepherd, president of the Oxford Street Association that embraces most of the big department stores, expects his members will collect $340 million in foreign exchange, $100 million more than last year.

"We hope there will be a sense of fun and atmosphere in Oxford Street," he says.

Harry Fenton, a men's clothier on the street, is already contributing to the fun. "Jubilee Offer," his window proclaims. "We are giving away a $8.60 voucher with every suit purchased."

This classic example of the openended "10 per cent off" can even be seen in Knightsbridge, a tonier shopping quarter. Elliots, a posh ladies shoe shop, is offering Jubilee "savings" of sterling 1 to Sterling 10 $1.72 to $17.20 on every purchase. Since a pair list for as much as 103, the place needs to push. As an added inducement, all customers receive "free" the newly minted Jubilee crown piece, 25 pence or 47 cents.

Harrods, an encyclopedic emporium of goods practical and otherwise, is displaying some splendid conspicuous consumption tie-ins. ASilver Jubilee champagne bucket with crown goes for A Cartier "limited edition" Jubilee pocket lighter retails at $550 and a Jubilee powder compact with the queen's profile sells for a modest $37.80.

Inevitably, the souvenir shops are pushing pictures of the queen and her crown on paper napkins, paper plates, ash trays, beer glasses and mugs. The Westerner, a boy's shop with slightly confused notion of transatlantic life (At-shirt proclaims "Detroit Yankees") sells red basketball sneakers trimmed with white and blue.

Indeed, it is hard to find any sort of clothing on Oxford Street - from cloth coats to bikinis - in colors other than those on the flag.

If C & A, a moderately priced store, has its way this summer tennis players will wear red, white and blue sweathers and red or blue-tinted sun visors. One window is straight out of an Italian surrealist film. It is filled with the legs and torsos of shaven mannequins, their limbs dressed in red, white and blue knee stockings. Two life-sized cardboard Guardsmen look on stolidly.

Nearby, Lord John insists that the well-dressed "executive" will wear a red jersey under a blue jacket over white slacks ribbed with silver thread. He can do all this for $137.47.

At Marks and Spencer, Britain's mass market department store and one of the most admired british enterprises abroad, the Jubilee tie-in is notable for its absence. Restrained "Marks and Sparks" has posted in an obscure first-floor corner, "Loyal greetings to Her Majesty the Queen."

More practically, signs everywhere warn, "Beware of picpockets."

"We don't jump on short-lived band-wagons," a spokesman said. "We try to go for long production runs so we can get our blend of value and price."

But across the street, Selfridges more tan makes up for this austerity. Banners on bolden trumpets hang from every pillar and Union Jack signs insist, "Selfridges for Britain's best." Red, white and blue jeans are decribed as examples of "British jeanius." The queen, her consort, her crown or her flag are on pillow cases, tankards, salt and pepper shakers, mittens, boxes of cookes and tins of tea ("Jubilee gift food packs"), handbags, quilts and jars of mustard.

If Selfridges couldn't bring itself to stock bras and panties with royal or patrotic motifs, a chain of "sex shops" did. Their efforts, moreover, are matched by "The Sex Pistols," a rock group notorious for its anarchistic or "punk" style. The Pistos' have recorded a chant (retail price $1.20) that begains:

"God save the queen and the facist regime. It made you a moron, a potential H bomb. God save the queen. She's not a human being."

Because they have money, special attention is paid here totourists from oil-soaked Arab lands. They have helped drive up the prices of rentals at summer apartments - one Arab is reportedly paying $2,000 a week for his summer Jubilee residence and $260 a week is the going rate for a modest central London one-bedroom apartment.

At a newsstand strategically situated between the Hilton and the Playboy Club, the long line of Arab papers is suplemented by a Jubilee special, a "Guide to Saucy London." Its cover shows a young lady about to bite into a rubber ball painted in the national colors.

The Dorchester Hotel is outdoing all others on Park Lane in patriotic fervor. From roof to street, its walls are lined with 8-foot Union Jacks. The hostelry is owned by Arabs now which may account for the passion.

At least some of the Jubilee profiteering will flow overseas. Detective Inspector Henry Dowswell of Scotland Yard's "dip squad" warns that professional picpockets have descended in force from overseas, notably from Italy, Chile and Colombia.

"They all seem to be here," he said, and typically they work in packs of four. One man blocks a victim infront, one on each side jostle him and pin his arms. The man in the rear lifts the wallet and checkbook.

The teams are working Oxford Street, Regent Street and Picadilly as well as the subway stations at Victoria Embankment and Oxford Circus.

British pickpockets are not objecting to the invasion. There's a big enough market for everybody," Dowswell says. The Tourist Authority expects 11.4 million foreign visitors this year, up 1.3 million from 1976.

"Don't carry any more cash or checks than you need on any given day," Inspector Dowswell advises. What the pickpockets miss, the retailers count on collecting.