When Elizabeth ascended the throne as Elizabeth II in 1952, the United Kingdom emerged from a war economy. Butter and meat are still rationed. The economic situation is disastrous, the debt is fifteen times greater than the country’s gold and foreign exchange reserves. It is in this context that theThe queen attends the nationalization of part of the economy. Energy (coal-gas-electricity), the steel industry, rail, rail and air transport, as well as the road network came under state control. The national health service, applied since 1948, guarantees free care but has eliminated 95% of liberal medicine.
oil monarchy
With the discovery of North Sea oil reserves in the 1960s, the British monarchy was transformed into an oil monarchy. The financial manna from oil makes it possible to improve the balance of payments and reduce public debt. An economic rebound that will be short-lived.
On May 27, 1977, when the Queen of England was preparing to celebrate her silver anniversary for the 25th anniversary of her reign, the country was in crisis, with unemployment, inflation, riots. The rock group Sex Pistols harshly attacks Elizabeth II: “God save the Queen, God save the Queen, the fascist regime has made you […] a potential H-bomb, God save the Queen, She is not a human being…”. Public protest and censorship of the song in most radios. 150,000 copies of the album will be sold ten days after its release.
Above all, during the winter period of 1978-1979, the country faced the “winter of discontent” with large strikes and demonstrations to oppose wage caps to fight inflation. England inherits the unenviable title of “sick man of Europe”. The conservative party takes advantage of the situation to win the 1979 elections. Margaret Thatcher implements liberal-inspired economic reforms. These reforms are appreciated in various ways. The filmmaker Ken Loach, awarded 7 times at the Cannes Film Festival, will echo those who remain outside this policy and trigger a heated controversy in the United Kingdom. The oil windfall allows the British government to avoid the worst. But little by little, the gradual reduction of hydrocarbon resources leads to a deficit in the balance of payments and an increase in public and private debt.
To save the kingdom, Britain liquidates its aging industry and relies on services. The gamble is bold but worth it. As evidence, the goods trade deficit reached £15bn in 2019, offset by a record services balance surplus of £21bn.
the fall of the pound
At the same time, the City, long the world’s leading financial center, is in decline. Beginning in 1954, the pound’s share of international foreign exchange reserves fell below that of the dollar. Today, if the pound is still a reserve currency, it is now outperformed by the dollar, the euro and the yen, but remains ahead of the yuan. Brexit has further accelerated the fall of the pound, today at $1.16, well below the average of the last forty years ($1.70).
Despite the decline of its currency, the kingdom has seen a rise in per capita real income of 1.9% since the Queen’s accession to the throne. However, since the beginning of the year, social unrest has been on the rise in a context of declining purchasing power. The railway and postal workers, who for several months have multiplied the days of strike and demand an increase in wages to compensate for inflation, announced the interruption of the movement after the death of the queen. In short, if the queen was unanimous at the time of her death, her reign was not a long, calm river.