87-97 Economy

Question 1

Economy before 1992 election

Answer 1

-mid 1991 to early 1992 unemployment rose 1.6-2.6 million
-homeowners trapped in negative equity, homes repossessed
-high public spending on nhs and transport

Question 2

Black wednesday

Answer 2

-britain part of erm, had to keep currency to a fixed rate of exchange
-sep 1992, currency under pressure, reached climax 16th sep
-lamont continued to raise interest rates, up from 10 to 15%
-pound continued to sink, lamont announced leaving erm

Question 3

The economy after black wednesday

Answer 3

-leaving erm allowed interest rates to be lowered, helped exporters
-unemployment slowed, housing market picked up
-benefited from deregulation and flexible working practices

Question 4

Privatisation

Answer 4

-coal industry 1994
-railways 1996
-private finance initiative, private companies funded infrastructrure and services which the state would pay for over time

Question 5

Economic reasons for thatchers downfall

Answer 5

-stock market crash of 1987 after big bang in 1986
-policies of nigel lawson, 1988 budget led to a balance of payments issue
-inflation at 10.9% by 1990