The City of London and British Economic Policies: 1960s to 1980s

Abstract

British economic policy making between the 1960s and the 1980s needs to be analyzed in the context of British “exceptionalism”. Britain is the only industrialized country to have a center that hosts such a high concentration of financial services and related professional activities. To the extent that this center, the City, is unique, Britain is also unique. The consequences of the City’s enduring economic prosperity on the development of the establishment, the state system, and the economy of Britain can scarcely be overestimated. It is true that after the Second World War the City experienced a period of crisis, as the sterling’s weakness in the world depression and the entrenchment of world economy in protective and nationalist policies undermined both its domestic and international power (Overbeek 1990). However, from 1945 on, and particularly from the 1960s to the 1980s, a series of political and regulatory decisions led to a return of the City’s economic prosperity and political power. Those decisions were actively pursued by the intervention of British authorities, primarily the Bank of England and the Treasury.