Economic crises; 1951-1979 - causes and consequences.
- Created by: Liam Moffett
- Created on: 29-05-12 19:49
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1956 Suez Oil Crisis
CAUSES
- General Nasser nationalisaed Suez Canal.
- Britain sought to protect commercial interests, iconic of the empire.
- Eden was confident that Britain was still an imperial power.
CONSEQUENCES - ECONOMIC
- Economic crisis - Oil embargo on Britain.
- Run on the pound.
CONSEQUENCES - POLITICAL
- Eden was exposed as a poor PM.
- Revolt led by Macmillan (Chancellor) to climb down regardless of humiliation.
- America said "no". Eisenhower called for Britain to stand down, pressure from the United States.
1964 £4m Balance of Payments Deficit
CAUSES
- Reginald Maudling as Chancellor sought to prevent high unemployment.
- Sought to achieve this through tax concessions and "expansion without inflation" - key Macmillan policy.
- This caused a severe balance of payments deficit.
CONSEQUENCES - ECONOMIC
- Highlighted Britain's poor performance alongside other western nations; Japan and West Germany.
- Highlighted the Gov'ts. failure to modernise the economy.
- Failure of Stop-Go policies: Lacked consistency, providing spurts of economic growth but nothing more.
- Beeching Axe in response to poor economic performance.
- Highlighted the failure of Macmillan's "expansionist" policies.
CONSEQUENCES - POLITICAL
- Showed Macmillan to be out-of-touch and old.
- Highlighted Britain's poor performance within the world economy.
- Exposed the need for modernisation.
1967 Devaluation
CAUSES
- Large balance of payments crisis.
- Seeking to break out of the mould of stop-go - Exchange rate to the dollar was too high.
- Prices and Incomes policy to stop inflation (wage fixes) wasn't working.
- Docks…
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