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In this epoch of British history government policy principally tried to manage the level of inflation, the balance of payments, the level of investment, the rate of growth and the level of employment. The tools available to the government can broadly be divided into two categories manipulating the level of fiscal expenditure in the economy as well as influencing the level of monetary supply in the economy.
Fiscal policies largely revolved around changing the levels of government taxation and expenditure, to expand or contract the economy. The government would purposely run a surplus, where revenue from taxation would be higher than expenditure on public goods and services, in order to calm down the economy and reduce inflation...
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