Great Depression in The United Kingdom - Slow Recovery

Slow Recovery

Following Britain's withdrawal from the gold standard and the devaluation of the pound, interest rates were reduced from 6% to 1%. As a result, British exports became more competitive on world markets than those of countries that remained on the gold standard. This led to a modest economic recovery, and a fall in unemployment from 1933 onwards. Although exports were still a fraction of their pre-depression levels, they recovered slightly.

Unemployment began a modest fall in 1934 and fell further in 1935 and 1936, but the rise in employment levels occurred mostly in the south, where lower interest rates had spurred the house building boom, which in turn spurred a recovery in domestic industry. The North and Wales remained severely depressed for most of the decade. In severely depressed parts of the country, the government enacted a number of policies to stimulate growth and reduce unemployment, including road building, loans to shipyards, and tariffs on steel imports. These policies helped but were not, however, on a sufficiently large scale to make a huge impact on the unemployment levels.