The Development of UK Monetary Policy, 1949 to 1990

Paul Temperton

Chapter 1 in UK Monetary Policy, 1991, pp 1-22 from Palgrave Macmillan

Abstract: Abstract During the 1950s and early 1960s, the UK economy grew at a rate which was sufficient to keep unemployment at a very low level. Economic policy was aimed at ‘managing demand’ so as to achieve a level of economic activity which was sufficient to obtain ‘full employment’. The principal constraint on this demand management policy was the maintenance of the value of the exchange rate at $2.80/£. When economic growth became too rapid and the balance of payments deteriorated, economic policy would become more restrictive in order to moderate demand, correct the balance of payments position and hence moderate pressure on the exchange rate. In the period of correction, any balance of payments deficit was met largely by running down the official foreign exchange reserves.

Keywords: Exchange Rate; Interest Rate; Monetary Policy; Money Supply; Nominal Interest Rate (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11836-6_1

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DOI: 10.1007/978-1-349-11836-6_1

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