2. economic developments

Question 1

evidence of a post war boom?

Answer 1

Food rationing ended July 1954

Birth rate increase- baby boomers - by 1961 5% more people in Britain than in 1951

Global econ booming after war - sustained increase in overseas trade → huge earnings from exports
+ Rising demand at home → plentiful employment

1955 estimated that full employment had been achieved

Numbers in trad occupations fell, but huge expansion in electrical + engineering work

Service industries growing

Rising wages - butler’s ‘give away’ budget 1955

People felt more affluent - growth in consumerism

Higher income per head than any other major country besides US, but growth rates were lower than others

Question 2

what was causing inflation?

Answer 2

growth in wages exceeding growth in production

Question 3

what are stop-go policies

Answer 3

go periods of low interest rates and rising consumer spending, followed by stop periods of spending cuts and higher interest rates to try to control overheating economy

unstable

Question 4

what caused the balance of trade deficit

Answer 4

higher salaries had increased consumer demand, they didn’t encourage manufacturers to increase their export trade

britain importing more than exporting

Question 5

what were the economic consequences of suez?

Answer 5

Pressure from US over suez exposed Britain’s financial weakness → run on the pound

Question 6

what were the tories divided over?

Answer 6

e.g. Mac’s chancellor, Thorneycroft, wanted to limit wage increases - monetarism

opposed by

one-nation conservatives, wanted full employment

division didnt do lasting harm to party, thorneycroft’s attempts to cut spending overruled by mac 1958, thorneycroft resigned

Question 7

by when had the sterling regained its value against the dollar?

Answer 7

1959

Question 8

what was the outline of the 1959 april budget?

Answer 8

provided tax cuts of £370 mill, contributed to feeling of affluence and mac’s reelection

Question 9

what did the government do in response to econ overheating 1961

Answer 9

forced to introduce ‘pay pause’ to hold down wage inflation, + ask for loan from IMF

Question 10

signs of economic problems

Answer 10

Becoming clear that economic growth in europe leaving britain behind

Trade with the empire + commonwealth not sufficient to keep up

eec application rejected 1963, setback for mac’s economic policies, showed britain seen as economically weak

30%+ of rail network shut down in response to 1963 beeching report recommendations

Question 11

purpose of NEDC + NIC

Answer 11

est 1962, to oversee economic planning + wages + prices

Question 12

consequences of maudling’s (chancellor of exchequer) go phase in 1963

Answer 12

britain’s growth rate rose from 4% in 1963 –> 6% 1964
but… exports rose just over 10% and imports remained nearly 20% higher