The 1976 sterling crisis was a currency crisis in the United Kingdom. Inflation (at close to 25% in 1975, causing high bond yields and borrowing costs), a balance-of-payments deficit, a public-spending deficit, and the 1973 oil crisis were contributors.[1]
The origins of the crisis have been attributed to the 1972 Conservative "spend for growth" budget initiating the inflation cycle.[2]
James Callaghan's Labour government had to borrow $3.9 billion[a] from the International Monetary Fund (IMF),[4] with the intention of maintaining the value of sterling.[5] At the time this was the largest loan ever to have been requested from the IMF.[6]
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