economic developments 1951 - 1964 Flashcards
what was causing inflation
growth in wages was greater than the growth in production
how did macmillan want to respond to the inflation
he thought people needed to have restraint in the demands we make and common sense in how we spend our income
what would happen if imports exceeded exports
government would put in high interest rates and freeze wages
leading to a fall in demand
so a decreased output
what would happen when output of the economy decreased
control were removed by the governement
demand increased
rising imports
imports exceed exports
why were there issues with the balance of payments
higher wages had lead to more consumerism but it had not encouraged manufacturers to increase trade export
how did stop go economics affect the government
it caused divides in the cabinet in the summer of 1957
how many people were unemployed in 1955
200,000
less that 1%
how many people were employed in that service industry by 1960
5 million
roughly the same as the heavy industry
how did the suez crisis affect the economy
pressure from america started a run on the pound ( rapid fall of the pound in international currency markets )
what was proposed to counteract the run on the pound and by who
chancellor peter thorneycroft
suggested that they limit wage increase and cut the money supply
macmillan overruled his ideas in 1958
when did the sterling regain value
by 1959
what did the econemy expanding lead to
april 1959 tax cuts of £370 million
econmeny continued to grow from 1960 -64 but
they remained stuck in a cycle of stop - go economics
why did the gov put a pay pause in and when
1961 because they feared the economy was over heating
it was to hold down wage inflation
what % did exports rise from 1960 -64
10
