Why Did Thatcher Resign As Prime Minister: Economic Difficulties

Question 1

Why was the stock market crash important ?

Answer 1

October 1987
- wiped out 24% share prices, Chancellor Nigel Lawson thought this may trigger recession
- in response, he implemented a 1988 budget to reduce income tax rates but this stimulated a consumer boom increasing prices as it had previsouky relied on high rates to control the boom

Question 2

What was the result of Lawsons budget ?

Answer 2

• Lead to 1989 inflation increasing to 8.3% wichb meant Lawson then attempted to control it
• ditching monetarism for raising interest rates which meant that by October 1989 interest rates reached 15%

Question 3

What did this all mean for the people affected ?

Answer 3

• British home owners were affected, those who Thatcher admired, found themselves paying heavily for their houses which they had been encouraged to buy
• her claim of an economic miracle seemed dubious