The Effect Of World War I On England's Economy

Prior to the onset of World War I, England was a dominating super power but by the end of World War I, England lost its title. England’s economy plummeted because World War I cost millions of dollars and the debt incurred from the war was devastating to the country’s economy.
According to bbc.co.uk, “England spent 3,251,000,000 pounds on World War I” that’s equivalent to 4,661,446,350.00 US dollars! In response, the government increased the amount of people who paid income tax from 2% in 1913 to 8% in 1918, borrowed money through international loans, implemented war bonds, and printed money due to the repeal of the Gold Standard by the Currency and Bank Notes Act of 1914.
As stated above, the end of World War I in 1918 saw England facing millions
According to historic-uk.com, “During the 1918 General Election campaign, Lloyd George promised comprehensive reforms to deal with poor education, housing, health and transport …‘a land fit for heroes’. Following the famous economist John Maynard Keynes who, according to the Library of Economics and Liberty, “Wrote The General Theory and advocated deficit spending, during economic downturns to maintain full employment,” meaning the government borrowed huge sums of money, invested it, and then paid back it back. Lloyd George implemented Keynes’s ideas in hopes of kick-starting the economy. However, as a direct result of this borrowing, inflation skyrocketed. To attempt to counter this, the government implemented the Geddes Axe of 1921 which was a series of sharp cuts in government spending. Although inflation was halted and deflation started to occur, this was not beneficial for the economy which started to slow down again. Adding to the government's dilemma was the question of what to do with the returning soldiers, mass unemployment, and women not wanting to return to their pre-war roles. The government needed to find soldiers jobs to get the country moving again otherwise their benefits would be a drain on an already fragile economy. After deflation and inflation had balanced themselves out, the economy was better
The first four years after the war looked promising with the post war boom, but as stated before, that was short lived. Increased overseas competition and two decades of mass unemployment meant that while some growth did occur, the effects of WWI were deep rooted. It would take a lot more for this period to be considered a period of total growth and shake off the legacy of the First World War. Although England’s economy eventually recovered, WWI had far reaching effects on England’s economy especially with foreign trade. During the War England had to sacrifice many of its key industries to focus on the war effort. Many of the suppliers cut off from the supply of English goods either turned to competitor's brands or developed their own industries so when the war finished, many of the industries, particularly the labor intensive industries in the north, found themselves with no