4.3.1

The Economic Impact of WW2

Test yourself

Economic Impact of WW2

The aftermath of WW2 impacted Britain's economic policies at home and abroad. Despite attempts to continue trading with the Empire, Britain's best trading partners lay in West Europe.

Illustrative background for British economy after WW2Illustrative background for British economy after WW2 ?? "content

British economy after WW2

  • On the home front, rationing would persist in Britain until 1954. Lots of buildings, homes, and factories were destroyed by the Luftwaffe's bombing.
  • Britain’s economic position was severely weakened by World War Two.
  • After World War Two, Britain's Debt:GDP had risen from 110% to 240%.
  • To fund the war effort, Britain had been forced to sell all of its overseas assets.
  • Now Britain was losing its colonies because of the rise of self-governing and nationalist movements.
Illustrative background for The EFTAIllustrative background for The EFTA ?? "content

The EFTA

  • In 1958, the EEC was a free trade area including Germany and France. This would later evolve into the European Union.
  • In 1960, Britain created the EFTA (European Free Trade Association) with Austria, Portugal, Sweden, Denmark, and Norway as a competitor, but these nations did not really trade much with each other.
  • Britain applied to join the EEC but Charles de Gaulle of France vetoed Britain's entry.
  • In 1967, Harold Wilson (the Labour Prime Minister) devalued the pound from £1 = $2.80 to £1 = $2.40. This aimed to increase exports, but Britain's manufacturing industries were unproductive and not innovative.
  • By 1956, 63% of Britain's imports and 58% of Britain's exports went to Western Europe (Tomlinson, 2004).
Illustrative background for Post-war reconstruction?Illustrative background for Post-war reconstruction? ?? "content

Post-war reconstruction?

  • The Colonial Welfare Acts of 1940 and 1945 allocated £120 million to economic development in the colonies. In 1963, this organisation was renamed the Commonwealth Development Corporation.
  • This had early success as the Empire’s exports increased from £319.6 million to £1.5bn in the 10 years from 1946 to 1956.
  • However, Britain also spent £49 million on a failed nut farming scheme in Tanganyika, which destroyed the farmland on which it was planned.

Jump to other topics

1High Water Mark of the British Empire, 1857-1914

2Imperial Consolidation & Liberal Rule, 1890-1914

3Imperialism Challenged, 1914-1967

4The Wind of Change, 1947-1967

Go student ad image

Unlock your full potential with GoStudent tutoring

  • Affordable 1:1 tutoring from the comfort of your home

  • Tutors are matched to your specific learning needs

  • 30+ school subjects covered

Book a free trial lesson