IMF loan Flashcards
When was the IMF founded and why?
Founded in 1945 to help rebuild the global economy after the Great Depression and WWII.
What are the 3 main objectives of the IMF?
Oversee exchange rates and promote economic growth.
Provide short-term capital to fix balance of payments.
Fund international economic development projects.
How much was the IMF loan that Dennis Healey secured in 1976?
£3 billion.
What were the conditions attached to the IMF loan?
The government had to make significant public spending cuts.
What economic concern was associated with the IMF loan?
It could potentially lead to inflation.
How much of the IMF loan did the UK actually use?
Only about half of the agreed £3 billion loan.
What major policy shift did the IMF crisis reinforce?
A move from Keynesian economics (full employment/welfare) to prioritising inflation control and spending cuts.
What was the political impact of the IMF loan on the Labour Party?
Increased party divisions, especially from the left (Crosland, Foot).
Seen as an ideological betrayal by some.
Strengthened militant elements in the party and unions.
How did the public and opposition view the IMF crisis?
The Conservatives branded it a “national humiliation”; it reinforced Britain’s image of economic decline.
