In the UK, funding the World war 1( the Great War, as it was called then) had a severe economic cost. It went into a huge pool of debts with interests payments forming around 38% of all government spending. The inflation increased dramatically between 1914 and its peak in 1920, while the consumer expenditure fell down by more than 50%. British private investments abroad were sold, raising 550 million pounds. However, 250 million pounds of new investments also took place during the war. The net financial loss was thus approximately 300 million pounds. Although the loss in property was less, the significant being 40% of the British Merchant fleet sunk by German U-boats and most of this was replaced immediately after the war. Correlli Barnett, a military historian argues that the Great War did not inflict crippling economic damage on Britain but the war crippled the British psychologically. Less concrete changes include the growing assertiveness of Commonwealth nations. Important battles such as Gallipoli for the island continent Australia, and Vimy Ridge for Canada led to increased national pride and a greater reluctance to remain subordinate to Britain, leading to the growth of diplomatic autonomy in 1920s. These nations decorated these battles in propaganda as symbolic of their power. Traditionally loyal dominions such as Newfoundland( the America as we know it now) were disillusioned by Britain’s apparent disregard for their soldiers. This eventually lead to the unification of Newfoundland into the Confederation of Canada. Other colonies such as India and Nigeria also became increasingly assertive because of their soldiers’ participation in the war. The populations in these countries became increasingly aware of their own power and Britain’s fragility. Britain failed to gain the same empowerment above these colonies, and after the second World War, it lost much of its power over the Indian subcontinent leading to their freedom from being a British colony.
Aftermath of WW1 on Britain!