Ages of austerity

Ages of austerity and rise of Britain economy

In 1945, Britain was triumphant in defeating the axis powers. After war the States meted in conferences like Yalta, where Britain were one of the Big Three powers. But, the reality was that Britain were completely breaking. The war had exhausted the financial reserves. The debt of the State was the double of the GDP, so in certain way, Britain were in crisis.

In 1946, the government sent the great economist, Keynes to Washington to argue for an £8bn loan. The American's politely listened, but only to refuse. It was only the heightening of cold war tensions that America became motivated to bailout Britain and the rest of Europe. All European States need the America loans, they were vital to keep the UK economy afloat, was at this time a period of mass starving, so government need cash in their budgets.




Yalta conference: Winston Churchill, Franklin D. Roosevelt and Joseph Stalin



Other relevant point was the introduction of a national and universal health care service by Nye Bevan, that support all the families, deprivation the health system. It was a great achieve of the government given the fiscal state of the UK. This only come true, with the US’s loan.

"People have never had it so good" Harold Macmillan, ex prime minister

The 1940s and 1950s, in the country were an age of austerity (rationing ended in 1954). Despite of it was a full employment era, regarding the horrors of the Great Depression, this was no small achieve. At the end of rationing, come the booming of global trade and this derive in a fast rise of the living standards. British population entered in a new era of consumption, with labor saving devices for example vacuums and washing machines. the welfare of the population come, but not as well the other European powers, where UK lost a relative competitiveness