How successful were the national governments in bringing economic recovery in Britain in the years 1931-1939?
The National Governments experienced moderate success in bringing about economic recovery in the years 1931-1939. It would be inaccurate to say that the policies of the governments were the only contributing factor as they alone were not sufficient enough to tackle the harsh economic climate, but for the most part the National Governments were responsible for a moderately successful economic recovery.
The National Governments put in place several significant policies that were successful in bringing about economic recovery in Britain. In 1932 the decision was made to lower the bank rate to 2% which was beneficial to the recovery for various reasons including that the lowered rates resulted in what people referred to as ‘cheap money’, an idea which enveloped the public and resulted in many taking out loans and mortgages. This new wave of prosperity meant people were spending more and increasing demand, which in turn stimulated the economy by creating a demand for staff, which led to lower unemployment. The National Government was responsible for this cycle of prosperity and the consequential growth in consumerism, which aided the recovery significantly.
Furthermore, though not one of their original intentions, the National Government were responsible for shelving the Gold Standard in September of 1931 which proved to aid economic recovery. It allowed the value of the pound to depreciate from $4.86 to $3.40, which as a result made British exports cheaper so more goods were sold internationally. The timing however proved to be a limiting factor as other currencies were leaving the gold standard and also depreciated in value resulting in a wide range of foreign competition. This was a key reason why so many countries introduced protective tariffs, making exporting goods more difficult. Britain did however sell more exports to countries within the...
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