- German U boat attacks on British sea traffic devastated British trade. Britain lost overall 11.7 million tons of shipping or 54% of country’s merchant fleet strength.
- Loss of Singapore in South East Asia and other major colonies disrupted trade and cut off vital supplies of raw materials such as rubber from Malaya.
- Industrial production of producing weapons of war meant less produced for export. Britain tried reducing imports by increasing home production but was in trade deficit.
- 1/3 of Britain’s foreign assets were sold off and Britain had to rely on Lend-Lease program, where USA supplied Britain.
- Britain had to rely on Empire for imports. Considerable investment by colonial governments, for example in Africa (Tanganyika Groundnut Scheme), to help increase supply of foodstuffs and raw materials. Where colonies weren’t economically beneficial (India, Burma, Palestine), Britain let them go.
- Colonial Development and Welfare Act of 1940 wrote off some colonial debts, provided colonial grants or loans of up to £5 million per year.
Further act in 1945 increased aid available to colonies to £120 million over 10 years and required ten-year development plans to allocate funds.