Economic Developments: Economic Issue, IMF Loan Flashcards
What was Callaghan’s initial economic aim when he became PM?
To end stop-go Economics
What was the situation with managing the Balance of Payments deficit in 1976?
The deficit could not be paid off by financial reserves
What year did Callaghan make a speech about difficulties of maintaining full employment?
1976
What were the ‘Twin evils’ mentioned in the speech?
The combination of unemployment and inflation
How much had government spending gone up from 1974-76 in proportion of the GDP?
It had increased by 6%
How much of the British public were unemployed in 1974?
600,000
How much of the British public were unemployed in 1976?
1.5 million
How much of the British public were unemployed in 1979?
1 million
What was the countrys BoP deficit in 1976?
£1 Billion
What year did Callaghan put interest rates up to 15%?
1976
What was Callaghan preparing his government for with his ‘Twin evils’ speech?
Receiving an IMF loan
How much was the IMF loan Callaghan received for Britain?
£3 billion
How much did Callaghan’s government have to reduce spending by to get the £3 billion IMF loan?
Had to cut government spending by £2 billion
How many British Petroleum shares did Callaghan have to sell to make up for the loan?
500 million shares
What year did Callaghan get the IMF loan?
1976
What fraction of the IMF loan did Britain use?
Half of it
What year did Britain pay off the £3 billion IMF loan in?
1979
Which recently nationalized company helped with the IMF loan crisis?
British National Oil Corporation
How did the British National Oil Corporation improve the IMF loan crisis?
It helped reduce the balance of payments deficit
How much was the British National Oil Corporation worth a year by the end of the 1970’s?
£1 billion a year
