The 1976 sterling crisis was a currency crisis in the United Kingdom. Inflation (at close to 25% in 1975, causing high bond yields and borrowing costs), a balance of payments deficit, a public spending deficit, and the 1973 oil crisis were contributors.[1]
The origins of the crisis are traced to the 1972 Conservative "spend for growth" budget that initiated the inflation cycle.[2]
James Callaghan's Labour government had to borrow $3.9 billion[a] from the International Monetary Fund (IMF),[4] with the intention of maintaining the value of sterling.[5] At the time this was the largest loan ever to have been requested from the IMF.[6]
- ^ "UK – IMF Crisis of 1976".
- ^ Steele, G. R. (2010). "INFLATION ECONOMICS: THE HEATH–BARBER BOOM, 1972–74". Economic Affairs. 30 (3): 79–81. doi:10.1111/j.1468-0270.2010.02028.x. S2CID 152522190.
- ^ 1634–1699: McCusker, J. J. (1997). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States: Addenda et Corrigenda (PDF). American Antiquarian Society. 1700–1799: McCusker, J. J. (1992). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States (PDF). American Antiquarian Society. 1800–present: Federal Reserve Bank of Minneapolis. "Consumer Price Index (estimate) 1800–". Retrieved 29 February 2024.
- ^ "Cabinet papers | IMF crisis". National Archives. Archived from the original on 11 January 2021. Retrieved 17 December 2015.
- ^ "UK – IMF Crisis of 1976".
- ^ "Sterling devalued and the IMF loan". The National Archives. Archived from the original on 22 February 2014. Retrieved 17 December 2015.
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