Crisis and Credit Control, 1964–1971

Abstract

Between 1964 and 1971 the UK suffered great economic difficulties, including repeated balance of payments crises, leading to a prolonged credit squeeze, the seeking of loans from the International Monetary Fund (IMF), and the devaluation of sterling in 1967. These issues dominated control over consumer credit. Hire purchase terms control continued to feature in government economic management, producing stronger objections from the consumer durables sector. While the Treasury saw them as a useful demand management tool, the Board of Trade complained of their damage to British industry and the Crowther Committee established to examine consumer credit called for their abandonment. There was also growing pressure, particularly from the Bank of England, to move away from the use of ceilings on bank lending. In 1971, a new system of credit control was introduced, reliant on changes in the cost of credit rather than restrictions on its overall availability.