page_title: Economic history of World War I
section_title: United Kingdom
hierarchical_section_title: Economic history of World War I / Allies / United Kingdom
caption_attribution_description: English: Women war workers sawing wood specimens for testing at the New Gun Factory, Woolwich Arsenal, London.
context_page_description: The economic history of World War I covers the methods used by the First World War, as well as related postwar issues such as war debts and reparations. It also covers the economic mobilization of labor, industry, and agriculture leading to economic failure. It deals with economic warfare such as the blockade of Germany, and with some issues closely related to the economy, such as military issues of transportation.
  All of the powers in 1914 expected a short war; none had made any economic preparations for a long war, such as stockpiling food or critical raw materials. The longer the war went on, the more the advantages went to the Allies, with their larger, deeper, more versatile economies and better access to global supplies. As Stephen Broadberry and Mark Harrison conclude, once stalemate set in late in 1914: "The greater Allied capacity for taking risks, absorbing the cost of mistakes, replacing losses, and accumulating overwhelming quantitative superiority should eventually have turned the balance against Germany".
  The Allies had much more potential wealth they could spend on the war.
context_section_description: The economy (in terms of GDP) grew about 7% from 1914 to 1918 despite the absence of so many men in the services; by contrast the German economy shrank 27%. The War saw a decline of civilian consumption, with a major reallocation to munitions. The government share of GDP soared from 8% in 1913 to 38% in 1918 (compared to 50% in 1943).
  Despite fears in 1916 that munitions production was lagging, the output was more than adequate. The annual output of artillery grew from 91 guns in 1914 to 8039 in 1918. Warplanes soared from 200 in 1914 to 3200 in 1918, while the production of machine guns went from 300 to 121,000.
  In 1915, the Anglo-French Financial Commission agreed a $500 million loan from private American banks. By 1916, Britain was funding most of the Empire's war expenditures, all of Italy's and two thirds of the war costs of France and Russia, plus smaller nations as well. The gold reserves, overseas investments and private credit then ran out forcing Britain to borrow $4 billion from the U.S. Treasury in 1917–18.  Shipments of American raw materials and food allowed Britain to feed itself and its army while maintaining her productivity.  The financing was generally successful, as the City's strong financial position minimized the damaging effects of inflation, as opposed to much worse conditions in Germany.  Overall consumer consumption declined 18% from 1914 to 1919.
  Trade unions were encouraged as membership grew from 4.1 million in 1914 to 6.5 million in 1918, peaking at 8.3 million in 1920 before relapsing to 5.4 million in 1923.   Women were available and many entered munitions factories and took other home front jobs vacated by men.
caption: Women workers at the Royal Gun Factory, Woolwich Arsenal, London
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