ABSTRACT
When North Sea oil was in prospect it was widely expected that self-sufficiency in oil would bring in a period of prosperity for the British economy. In fact the early 1980s have been years of deep recession. There are various explanations for this contrast between expectations and reality, including the slowdown in world economic activity connected with the second wave of OPEC price increases. But on our interpretation of events a major reason for the UK's slide into recession at a time of rapidly rising oil production was the restrictive economic policy adopted by the Conservative government which took office in May 1979. This policy was elaborated in the ‘medium-term financial strategy.’
