ABSTRACT
The advantages of Britain's central position in the world economy extended from the City of London and the workers in the staple industries to the upper and middle classes. After the First World War, Britain was never again to exert the same degree of influence on the world economy. The crisis marked a significant change in many of the principles which had governed Britain's economic relationship with the outside world for the previous century. The decline in world trade was accompanied by a particularly rapid fall in Britain's earnings from invisibles such as shipping and banking, as trade volumes and prices fell. In the post-war period, sterling had retained importance as a large-scale trading currency, or 'key currency', because of the existence of the sterling area. The Single European Market (SEM) is concerned with the harmonisation of products and standards, and the removal of barriers to the free flow of goods and services throughout the Union.
