The Sterling Devaluation of 1967, the International Economy and Post-War Social Democracy

T he Labour government of Harold Wilson devalued sterling from 1 = $2.80 to 1 = $2.40 on 18 November 1967. It had come to power in 1964 committed to the modernisation of Britain to be achieved by an average annual growth in the economy up to 1970 of 3.8 per cent. The vehicle for this transformation was to be the National Plan, in which the government was to co-operate with industry and the unions to increase both private and public investment, with rises in income held to what could be justified by improvements in productivity. Wilson's government had, however, been immediately confronted by a large current account deficit following a period of sustained economic expansion by the preceding Conservative administration. That deficit was estimated at the time to be approaching 800m, but later revised down to nearer 300m. Labour's attempts to turn round this position at the existing sterling parity of 1 = $2.80 failed to win the confidence of the financial markets, and the pound came under pressure. The defence of the parity, reinforced by borrowing from central banks and the International Monetary Fund (IMF), became the major preoccupation of the government's economic policy. The National Plan was eclipsed by an economic strategy based on a vain effort to satisfy creditors

Currency · Democracy · Devaluation · Economic history · Economics · Economy · Monetary economics · Political science · Politics · Spanish Civil War · Law · Political and Economic history of UK and US

• Economic Policy and the Problem of Sterling under Harold Wilson and James Callaghan

  C Rogers•Contemporary British History•2011

  Add to list

• The two sterling crises of 1964

  Open Access•Scott Newton•The Economic History Review•2013

  Add to list