ABSTRACT
The two institutions which became largely responsible for the imposition of economic policy were the Treasury and the Bank of England. Before 1914 the Treasury had been mainly concerned with running the civil service and supervising the public accounts. The Bank remained a private institution but over a long period it had assumed responsibility for the control of government debt as well as regulation of the banking system and the gold standard. Clearly the First World War had a dramatic influence on the role of government in British society. Policy decisions taken after the war meant that Britain had a clear and coherent economic policy during the 1920s. Gold standard policies during the 1920s involved a decade of varying levels of deflation, including cuts in public spending and high interest rates. The financial crisis of 1931 forced Britain to depart from the gold standard and the basic policy thrust of the 1920s was abandoned.
