What was the effect of the First World War on the economy of Britain?

(i) Britain which was the world’s leading economybefore the war faced a prolonged crisis.
(ii) After the war, Britain found it difficult to recapture its earlier position of dominance in Indian market and to compete with other countries.
(iii) Post-war economic recovery proved difficult. Britain borrowed large sums of money from the US banks as well as the US public. This was in addition to the money Britain borrowed to meet war expenditure. Britain thus was burdened with huge external debts.
(iv) In 1921, one in every five Britons was unemployed.Uncertainties of employment led to social tension.