It is evident that the nation is struggling due to families’ exposure to persistently growing costs, wage stagnation, and a decline in living standards.
And with the tax increases and budget cuts of billions that Chancellor Jeremy Hunt imposed in yesterday’s Autumn Statement, the country is poised to enter a worse recession.
However, the current economic position pales in contrast to the country’s previous difficulties.
In the 1930s, the 1929 Wall Street Crash and the 1931 bankruptcy of an Austrian bank contributed to the onset of mass unemployment in Britain as exports dropped and spending cuts were mandated.
In the decade following World War II, the country was riddled with bomb craters, rationing was still in effect, and families were grieving the loss of loved ones, both military and civilian.
In the 1970s, the inflation rate reached a shocking 25 percent, and Edward Heath’s government was pushed by striking employees to implement a three-day workweek, which resulted in widespread industry shutdowns and shopping and dining by candlelight.
The early years of Margaret Thatcher’s stint as Prime Minister in the 1980s were also difficult, as unemployment peaked at four million and inflation persisted.
Below, MailOnline examines prior instances in which the United Kingdom has been placed under economic pressure.
1930s
In 1929, the infamous Wall Street Crash sent shockwaves around the globe. The bankruptcy of a prominent bank in Austria in 1931, which precipitated a financial crisis in Britain, exacerbated the impact.
During that time, a minority Labour government was led by Labour Prime Minister Ramsay MacDonald.
The country was on the Gold Standard, which pegged the currency to the price of gold and caused the value of the pound to be artificially inflated.
Due to the inability of British manufacturers to compete on export markets, the economy ground to a halt, resulting in the unemployment of three million individuals.
The areas of coal mining, shipbuilding, and steel production were heavily impacted. There was an eighty percent jobless rate in several Northern cities.
Some families were brought to the brink of famine as their household incomes vanished, and unemployed men were forced to stand on street corners.
To combat the crisis, the National Government of 1931 instituted severe spending cuts. The salaries of all state employees were reduced by 10%.
The withdrawal of the United Kingdom from the Gold Standard practically led to a 25% devaluation of the pound against the dollar.
Despite the recovery of the economy, widespread destitution persisted in numerous urban areas.
This was clearly highlighted by the Jarrow Crusade in 1936, in which approximately 200 jobless men from the Northern town of Jarrow marched to London to protest the fact that seven out of ten residents of their community were unemployed.
Post-war period
Even though the United Kingdom emerged victors from the Second World War, the battle against Nazi Germany ravaged the nation’s finances and wreaked havoc on urban landscapes.
Prior to the war, the national debt was £760 million; by 1945, it was £3.5 billion. A quarter of the nation’s wealth had been spent on the war effort, which was close to £7 billion at the time.
One out of every three homes had been destroyed by bombing, and factories and stores had also been severely damaged or rendered inoperable.
Families were also affected by the deaths of almost 250,000 military personnel and a further 60,000 civilians.
The rationing that had been instituted in January 1940 lasted until 1954 – nine years after Germany’s surrender.
This meant that essential foods such as sugar, oil, meat, cheese, canned goods, and eggs were scarce in the early 1950s.
Britain’s towns and cities were riddled with bomb craters, millions of people lived in abject poverty, and many residences lacked facilities or toilets.
Years of conflict had also destroyed the nation’s industry and left behind a legacy of high taxes.
The lifting of rationing did not occur until 1948, beginning with grain in July of that year and clothing in March 1949.
The restriction of canned and dried fruit, chocolate biscuits, treacle, syrup, jams, and mincemeat ceased on May 19, 1950.
The gasoline rationing instituted in 1939 was lifted in May 1950. This was followed in September of same year by soap.
Then, in 1953, sugar and butter were no longer rationed, and meat was the last item to become freely available.
1945, however, marked the election of Clement Attlee’s Labour government, which in 1948 established the National Health Service.
Attlee also implemented William Beveridge’s proposals for a “cradle to grave” welfare state, including the creation of National Insurance and benefits such as unemployment provision.
1970s
While the current rate of inflation is having a significant impact on household budgets and paychecks, it was far worse in the 1970s.
In 1975, the inflation rate surpassed a stunning 25 percent, and by the end of the decade, governments, not the Bank of England, were setting interest rates at 17 percent.
Then, the inflation issue was caused by workers’ wages rising faster than the UK economy due to militant trade unions; at the same time, the price of oil skyrocketed due to Arab nations restricting supplies in response to the West’s support for Israel during the Yom Kippur War.
Edward Heath, the then-prime minister, was forced to impose a three-day workweek due to a severe energy deficit caused by coal miner strikes.
Nearly all enterprises were required to restrict their electricity consumption to three days per week and were prohibited from working for extended periods on those days.
The BBC and ITV were required to cease broadcasting at 10.30pm each night, while ordinary Britons were obliged to limit their heating to a single room and keep non-essential lights off.
In several pubs, customers were forced to drink by candlelight, while store employees across the nation utilized head torches to continue business.
Even the lights on the iconic Christmas tree in Trafalgar Square, which normally glow throughout December, were turned off until Christmas Day.
When Heath was removed from government after holding an election in which he posed the question, “Who controls Britain? “, his Labour successor Harold Wilson faced an even more dire circumstance.
Along with the inflation rate of 25%, wage inflation was prevalent.
In 1974, the average full-time weekly wage was £41.70, or £2,168 per year; by 1975, it had increased by 30 percent to £54, or £2,808.
Those who gained the most were workers supported by strong unions, which forced the government to agree to wage raises.
The pre-tax purchasing power of miners increased by 146% between 1970 and 1979, whilst millions of other Britons suffered.
The corresponding increase for bus drivers was 144%, and the increase for railroad personnel was 142%.
One 1979 Daily Mail headline warned of a “bleak winter outlook” as 15 percent mortgage payback rates loomed. These headlines reflect the severity of the inflation crisis that existed at the time.
Between 1970 and 1979, the price of power, groceries, and food increased by close to 300 percent, while the price of denim pants soared from £2.50 to £15. The cost of a brand-new Mini increased from $595 in 1970 to almost $2,400 in 1979.
Dominic Sandbrook, a social historian, has previously noted that the price of sugar increased by 184%, the price of carrots by 137%, and the price of energy by 66% in just one year.
But, out of fear of other devastating strikes that had already paralyzed the nation, ministers continued to approve massive pay raises for workers, a situation that contributed to greater inflation.
Wilson and his successor James Callaghan reduced inflation to single digits in 1978 by persuading unions to accept reduced pay packages. However, the situation deteriorated again in 1978 when lorry drivers went on strike to seek higher pay.
Ports, gas stations, and supermarkets were paralyzed during the Winter of Discontent, as supply networks came to a halt.
After the 1979 election of Margaret Thatcher and her determination to raise interest rates and impose public spending cuts, the price increases were ultimately halted.
Early 1980s
The United Kingdom entered a recession as a result of Mrs. Thatcher’s decision to hike interest rates.
By today’s standards, the inflation rate in 1981 was equivalent to approximately 18 percent.
The next year, unemployment surpassed three million for the first time since the 1930s, indicating that one in eight individuals were unemployed.
The cost of a basket of commodities rose from £9.40 in 1972 to £35 ten years later, causing additional hardship for consumers.
Inflation fell below five percent in the mid-1980s as a result of the decision to boost interest rates, which resulted in interest rates reaching a painful 17 percent, but at the expense of unemployment surpassing four million.
The cabinet of the prime minister, which included the tough-talking Employment Secretary Norman Tebbit and the Chancellor Geoffrey Howe, also implemented restrictions on public spending, which, while effective in further lowering inflation, exacerbated social dissatisfaction.
The basic rate of income tax was 30%, 10 percentage points higher than the current rate, while the standard rate of VAT was 15%, five percentage points lower than the current rate.
In the early 1980s, Northern Ireland had the highest unemployment rate, with one out of every five residents unemployed.
However, the industrial regions of northern England and Scotland were also negatively impacted.
In September of 1982, the year in which inflation reached 9.1%, NHS employees went on strike over salary. The three-day walkout rattled the health care system as nurses fought for a 12 percent salary raise.
Three months prior, Welsh miners in South Wales stopped work in support of health sector employees. In total, approximately 24,000 miners ceased working, with tens of thousands marching through Cardiff.
The victory over Argentina in the Falklands War, however, improved Mrs. Thatcher’s popularity, which had previously been perilously low.
Princess Diana and Prince Charles were photographed beaming outside of St. Mary’s Hospital in London as the birth of Prince William elated the nation.
Mrs. Thatcher’s violent battle with Arthur Scargill, the leader of the National Union of Mineworkers, began in 1984, as ministers pushed through proposals to close 20 uneconomic mines, resulting in the unemployment of 20,000 miners.
In March, within a week of the first miners coming on strike, more than fifty percent of the nation’s miners had stopped working.
The miners eventually returned to work, and the pit closure program resumed, despite the fact that the conflict lasted more than a year.