Assess the impact of the First World war on Britain’s economy.

(i) Post-war recovery was a difficult process in Britain because during the war industries had developed in Japan and India. After the war, it became difficult for Britain to recapture the earlier position of dominance in the Indian market and to compete with Japan in the international market.
(ii) It had borrowed huge amount from US too. Thus, at the end of the war Britain had huge external debts.
(iii) The war had led to economic boom due to a large increase in demand, production and employment. After the war, production decreased and unemployment increased. The government reduced floated war expenditure to bring them into line with peacetime revenues. These developments resulted in huge job losses. Thus, in1921, one in every five British workers was out of work.

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