The children are creating

Question

In the lyrics of Friends Will Be Friends by Queen:

Another red letter day
So the pound has dropped and the children are creating.

What does the phrase highlighted in bold mean?

Answer 1

Queen is a British band, and this usage of the intransitive create is British colloquial for "create a fuss", "make noise", or nearly, as ukayer says, "create havoc". The Compact Oxford Dictionary has this:

2 [no object] British informal make a fuss; complain:
   little kids create because they hate being ignored

The Cambridge Advanced Learner's Dictionary has this:

create verb (BE ANGRY) /kriˈeɪt/
[I] UK old-fashioned to show that you are angry
   If she sees you with an ice cream she'll only start creating.

The Collins Pocket English Dictionary has this:

4. (Brit slang) to make an angry fuss,

Dictionary.com (based on Random House dictionary) has this:

–verb (used without object)
8. British. to make a fuss.

The Collins English Dictionary — Complete and Unabridged also has this:

6. (intr) Brit slang to make a fuss or uproar

See also this post by lynneguist on Separated By a Common Language, where I first encountred the term. It's used mostly for little children (or those considered little children), rather than adults.

Answer 2

Creating as in "creating havoc", i.e. helping to make the day even worse.