Theme 1B- Changing Economic Landscape Flashcards
Impacts of WWI
Loss of trade, debt, devaluation, inflation, lack of modernisation
What was the effect of war on inflation?
Rose to 25% in 1918
What was the effect of war on national debt?
Britain spent £3 billion, were £8 billion in debt by 1920
What was the state of the economy 1919-20?
Short post-war boom, demand increased for previously scarce goods
What was the state of the economy 1920-21?
Severe recession, unemployment rose to 12% and wages failed to keep up with inflation
What caused the recession post-1920?
Loss in trade, underinvestment in industry and increasing industrial unrest
To what extent was recession limited in the 1920s?
Somewhat mitigated by spending cuts from 1922, but unemployment averaged 10%
How were interest rates used to curb recession in the 1920s?
High interest rates to raise the value of the pound. but curbed economic growth as encouraged saving
What was the effect of the 1925 return to the gold standard?
Returned pound to its pre-war value, disastrous for traditional industries as American trade became cheaper than Britain’s
How were taxes used to curb recession in the 1920s?
Raised each year, £24 per capita in 1922
How was spending used to curb inflation in the 1920s?
DLG appointed a Commission of National Expenditure, 1922 Geddes Axe
What was the 1922 Geddes Axe?
Cut spending on education, pensions, unemployment and health by £24 million, and defence spending by £79 million
What was the impact of the 1922 Geddes Axe?
Growing unemployment- never fell below 1 million during war years
What were protectionist policies in the 1920s?
Tariffs introduced on imported goods to protect British traditional industries
What was the effect of tariffs introduced in the 1920s?
Lack of modernisation, tariff walls in other countries. Industries that relied on exports suffered- by 1933 unemployment was 60% in shipbuilding areas and 49% in iron and steel industries
How did trade unions grow in the 1920s?
1915-18 TU membership rose by 4 million, attempts at introducing pay cuts or longer working hours met with resistance. 323 strikes launched in 1926, including general strike
What was the effect of the rise of trade unions?
Lack of wage flexibility- more had to be laid off. Halted progress of certain industries, as Britain couldn’t compete against countries with cheaper labour
What was the state of the economy in the 1930s?
Depression, high unemployment- 25% in 1933
How was unemployment distributed in the 1930s?
Areas centred on staple industries hit hardest eg coal in the north. London and the SE remained prosperous due to consumer industry
What attempts to curb inflation were made prior to 1931?
Spending cuts and high interest rates- divided the Labour government
What sparked the 1931 abandoning of the gold standard?
12,000 soldiers in Scotland mutiny in opposition to pay cuts.
Impact of abandoning the gold standards?
Devaluation of the pound, quicker recovery, unemployment fell, cut in interest rates, cheaper exports and increased productivity
