British Economic History, 1952-1963

2420 WordsFeb 20, 200810 Pages
Assess the period of 1952-1963 The period of 1952-1963 was in the heart of what is known as ‘the golden age ', which saw wide scale growth of GDP and investment in Western Europe. The distinguishing features of the post war period as identified by Matthews was of full employment, chronically rising prices, an abnormal ratio of domestic investment to income and relatively high growth in income per capita by historical standards. In this epoch of British history government policy principally tried to manage the level of inflation, the balance of payments, the level of investment, the rate of growth and the level of employment. The tools available to the government can broadly be divided into two categories manipulating the level of…show more content…
The success of the policy should not be overestimated due to the fact that comparisons of UK investment levels, fig 7, and those averages in Western Europe, fig 8, reveal that the UK is still comparatively lagging. The increase in the investment rate did however hold significance for the level of inflation during the period which was attributed to the shortage in the labour market. Sargent argues that the higher levels of investment, fig 7, in new machinery led to a greater requirement of labour than was released through the scrapping of old equipment and the growth of the labour market, leading to wage push inflation. The period of 1952-1963 saw chronic rises in, prices as illustrated in fig 4 and though the threat of inflation was of significant concern in the implementation of policies the conservative government never really managed to control the rate of increases. There were consecutive attempts to bring the level of inflation down with the government maintaining a current account surplus throughout the period. Many of the policies were still deemed as having too high of an inflationary risk, such as the expansionary policies of 1952-1955 where tax cuts were offered during a period where the economy was overheating suffering chronic inflation. The most successful of the deflationary policies employed during this epoch was that of Thorneycroft and Amory in 1957 and
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