Class notes
Economy under the Conservatives 1990-97
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Some notes on how the Conservative Government managed the economy during 1990-97.
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“How effectively did theconservatives manage the
economy in 1990-1997”
Created @November 28, 2022 8:15 PM
Topic Economy
Gov and PM Conservatives Major
Type Classwork
What is Black Wednesday?
1992 Chancellor: Norman Lamont
= lending rates, interest rates up 12%
= bank of England had to intervene
= if the bank opposes and challenges the exchequer = wrong government
The run on the £ ended up with 12% interest rates but the bleeding did not stop
ERM= economic community
= aimed to stabilise interest rates between countries, which were pegged to the DM
(german currency) in the ration 3:1 DM:£
= only allowed to flow in the range of 2.25%
= however Britian struggled to keep up in the amrgin and it was kicked out (italy also -
so not uniquely a John major problem)
Concerns regarding the system:
Positive: helped trade between countries and was a prelude to a single currency (euro)
Negative: relying on a currency which could also value and devalue, also the strata in
which the range is maintained (2.25%) is very small - later changed to 15%
= technically not really Britain’s fault…
Why it happened:
1. Inadequate harmonisation of past policies
2. Inadequate harmonisation of future policies
“How effectively did the conservatives manage the economy in 1990-1997” 1
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