The year 1950 marked a new economic era in the UK where the economy was seen to grow at about 50% of the general growth rate of the other major competitors in Europe. During the period which extended to the early 1970s the purchasing power parity of the economies like Germany and France surpassed the ones in the UK. At the same time, the UK share of exports from the major organizations fell from 20% to a mere 10%. The speculations on the UK falling below all the other major competitors increased as the region failed to register economic gains from the technological advancement of the time and therefore missed out largely from the numerous trading opportunities within the larger European community.
The period however marked a significant and successful benchmark for macroeconomic policies that attracted employment creation and witnessed favourable inflation rates to margins that had never been achievable in any other period. These shocks contributed considerably in characterizing the UK economy through its macroeconomic environment deteriorated significantly after the early 1970s. The rise in the employment opportunities in the environment of low inflation spurred the expansion of UK-based organizations as they focused on the new competition from the new global competitors. The activities in the global market intensified as the communication and transport mean improved staging a renewed vigour for the UK-based organizations to fight to remain afloat. The competition against the global new entrants in the market front was a factor of growth through the opening of the global market was also an opportunity to access a wider market.
The UK-based organizations were able to influence the demand conditions of their goods and services through monetary policies and fiscal policies. Through monetary policies, they managed to affect the decisions on borrowing and lending by the private sector through a change of conditions through which banks get funds from the central bank. The introduction of friendlier terms of borrowing meant that the organizations could be able to face the global competition from an advantaged position and therefore be able to pull consumers of their products and services through improved quality. Monetary policies were the major means to influence the demand of the UK-based products and services because of the ease and flexibility of the system. Fiscal policies involved having the government change its spending patterns and taxation plan to influence the demand of the products from UK-based organizations.
Though the stakeholders could pressurize the government to put relevant measures in place to allow such policies to take effect, this method is more rigid and its influence on the demand was slow. In periods when the demand was high the pressure to stabilize the output from the UK-based organizations while at the same time maintaining low inflation rates would force for stringent policies. The macroeconomic policies that were necessary to effectively maintain stability in the UK-based organizations was therefore that which would be consistent with spurring the growth of the national economy and stimulating employment opportunities.