Problems of the Post-Devaluation Period
Uncertainty Over Success of Economic Strategy
Nearly a year has elapsed since British Prime Minister Harold Wilson stunned his people and the world by announcing a devaluation of the pound sterling. The 14.3 per cent reduction in the official value of the pound—from $2.80 to $2.40 in terms of U.S. currency—brought to a dramatic conclusion the most severe sterling crisis in a decade. Fifty-five million Britishers swallowed the bitter medicine on Nov. 18, 1967, in a determined effort to promote the recovery of their ailing economy and to right the country's balance of international payments.
On the eve of the first anniversary of devaluation, British economists and commentators are far from agreement on the results of the step taken last year. Optimists ...