Explain the impacts of the First World War on British economy.
The First World War was the first modern industrial war. The fighting involved the world’s leading industrial nations. The machine guns, tanks and aircrafts etc. were used on a large scale. In view of these facts, the war had affected the British economy significantly as mentioned below : 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. It had borrowed huge amount from US to meet war expenditures. Thus, at the end of the war Britain had huge external debts. 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 bloated war expenditure to bring them into line with peacetime revenues. These developments resulted in huge job losses. Thus, in 1921, one in every five British workers was out of work. Anxiety and uncertainty about work became an enduring part of the post-war scenario.
