Section Three-Economic Impact of the First World War

Question 1

What was the economic impact of the First World War on Britain?`

Answer 1

• Much of Britain’s capital investment overseas had been wiped out
• The Pound had to be removed from the gold standard for the duration as gold reserves ran so low
• Estimated that WW1 cost about £35,000 million, which is over 13 times as much as the Boer War.

Question 2

What happened to Britain’s overseas markets before/after the war?

Answer 2

Production for the war was prioritised over making goods for expert and so Britain’s competitors were able to win markets normally dominated by British exports. Britain’s industries such as iron, coal and steel experienced great difficulties as the faced new competition- which was intensified by the Great Depression in the 1930s.

Question 3

What was the economic impact of the First World War on the Empire?

Answer 3

• India contributed almost £146 million to the war effort and the country experienced inflation ahd shorages during the war as a result. In 1914, two thirds of India’s imports came from Britain but started to fall. High taxes on Indian imports raised from 11% to 25% in 1931
• Canada benefited from the war emerging as an industrial power
• Australia and New Zealand, as exports of food, relied heavily on the British market and were consequently were hit hard by the disruption of trade caused by the war