Interwar Economic Chaos
The years after WWI were absolutely brutal for Britain's economy. Inflation soared to 50% in 1918-19, whilst unemployment became a massive structural problem that governments kept treating as temporary. Politicians were clueless about how to handle it.
The Liberal Party completely imploded during this period. Lloyd George's coalition fell apart due to scandals and crises, leaving the Liberals split between him and Asquith. This created space for Labour and the Conservatives to dominate British politics for decades.
Conservative governments tried to restore economic stability by returning to the Gold Standard in 1925, fixing the pound at $4.86. This backfired spectacularly - exports became too expensive, leading to more unemployment and the 1926 General Strike. The miners kept striking long after everyone else gave up.
Key Point: The 1922 Geddes Axe slashed government spending, especially on education and social services, showing how economic crises often hit public services first.
Labour's brief stint in power under MacDonald was overshadowed by communist accusations and the Wall Street Crash of 1929. When the economic crisis hit, MacDonald formed a National Government in 1931, abandoning his own party to implement harsh spending cuts that American banks demanded for their £80 million loan.
