Effect of Depression on GB

Impact

Less marked than on other countries such as Germany and Italy (decline in wages and consumption less than both)
Industrial production only fell slightly
Exports fell by over 1/3rd and unemployment rose to 2.8 million in 1932
Reasons why impact of Dep less marked in GB:
Gb not enjoyed economic boom in 1920s like Us, so less speculation
No banking collapse in GB, so savings not lost
Prices in GB fell more than wages aka REAL WAGES still stable, and even improved!
Welfare payments helped to some degree
Gov policies such as LOW INTEREST RATES and Devaluation of pound in 1931 (off gold) + tariffs might have helped

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Faster and earlier than in other countries. By 1937 income and production levels exceeded the peak of 1929. Short lived slump in 1937-8 and recovery in 1938-9
Exports never really recovered, but increased demand for consumer goods offset this
Unemployment, especially structural unemployment, remained high throughout all period. In 1937 10% insured workforce still unemployed. (Some recent studies say gov policies indirect positive effect on the problem)
New industries, construction (housing boom) + motor, credit for recovery in 1930s. Iron and steel even benefitted from housing boom,working class families first time entering housing market. Cheap oney + low interest rates helped boost the economy here
Drive for rearmament key reason for recovery in 1938- even shortages of goods

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Greatest problem of period- never fell below 10% of insured workforce + peaked to 26% in 1932
Enormous regional differences in rates of unemployment- London + Seat 1936 = 8% but in South Wales = 30%
Unemployment hit already suffering Staple industries hardest- already inefficient and over-staffed so quick to lay off workers- pre-existing problem in 1929 50% of insured unemployed in staples
Decline of exports = key reason for continuing decline in staple regions. But meanwhile in SEast some areas of south by end of 30s were experiencing labour shortages.

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Whilst gov did do very little to stimulate economy, dominant economic thinking of time suggested retrenchment, balancing budget. Staple industries arguably too far gone to be saved. Laissez faire option least worst option for time?
No banking collapse, no political upheaval and no rampant inflation = Britain came out of Depression much better off than other nations
MOST british workers experienced a real wages increase throughout the 30s + increase in living standards and access to consumer goods
Those living in Staple industries life did get worse. Main impact of depression = final nail in coffin for industrial north. North South divide continues to be a problem for next 50 years

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