Sterling

Abstract

Every economic situation has its monetary counterpart. The twentieth-century changes in the United Kingdom’s economic structure and place in the world economy required appropriate changes in monetary policy. It was, however, not always possible to foresee what sort of monetary policy would be needed; and even when this was understood, it was by no means easy to find ways of implementing it. From the 1920s to the 1960s there were difficulties in monetary adjustment to new situations, with the result that adjustments in production and trade were hampered and delayed. The gold standard may have suited the circumstances prevailing before 1914; but the attempt to restore it in the altered circumstances of the 1920s ended in failure. A managed currency system began to be evolved in the 1930s, only to give rise to difficulties in the different circumstances of the 1960s.