Explain the impact of the First World War on the Britain’s economy.
The First World War was fought between two powers blocks. The fighting involved the World’s leading industrial nations. This was the first Modern Industrial War.
- During the war, industries were restricted to produce war related goods. Entire societies were also recognised for war.
- Britain borrowed large sum of money from U.S. banks as well as from the U.S. public.
- The post war economic recovery proved difficult to Britain which was the world’s leading economy in the pre war period.
- While Britain was pre occupied with war, industries had developed in India and Japan.
- After the war, Britain found it different to recapture its earlier positions in the Indian
market and to compete with Japan intentionally.
- At the end of the war, Britain was burdened with huge external debts.
- When the war ended, production contracted and employment increased. At the same time, the government reduced bloated war expenditure to bring them into line with peacetime revenues.
- Many agricultural economies were also in crisis.