Gold Standard
Further information: Gold StandardFrom about 1921, Britain had started a slow economic recovery from the war and the subsequent slump. But in April 1925, the Conservative Chancellor, Winston Churchill, on advice from the Bank of England, restored the Pound Sterling to the gold standard at its prewar exchange rate of $4.86 US dollars to one pound. This made the pound convertible to its value in gold, but at a level that made British exports more expensive on world markets. The economic recovery was immediately slowed. To offset the effects of the high exchange rate, the export industries tried to cut costs by lowering workers' wages.
The industrial areas spent the rest of the 1920s in recession, and these industries received little investment or modernisation. Throughout the 1920s, unemployment stayed at a steady one million.
Read more about this topic: Great Depression In The United Kingdom
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