1973–1975 recession

Among the causes were the 1973 oil crisis, the deficits of the Vietnam War under President Johnson, and the fall of the Bretton Woods system after the Nixon shock.

The U.S. Bureau of Labor Statistics estimates that 2.3 million jobs were lost during the recession; at the time, this was a post-war record.

The three-day week was a state of emergency imposed by Conservative prime minister Edward Heath, which came into force on 1 January 1974, meaning that commercial users of electricity were limited to three specific consecutive days' consumption of electricity, and forbidden to work longer hours of those days, although services deemed essential were exempted from these regulations.

Heath fought to keep the Tories in government by attempting to form a coalition with the Liberal Party and offering a cabinet post to Liberal leader Jeremy Thorpe, but this attempt to remain in power proved unsuccessful for Heath and he was forced to resign as prime minister on 4 March, paving the way for Harold Wilson's Labour to return to power as a minority government[8] before winning a second election on 10 October by a majority of just three seats.

Inflation remained high, strikes continued to cripple manufacturing and public services, unemployment continued to rise above the 1,000,000 mark, and just after the resignation of Harold Wilson as prime minister in March 1976, his successor James Callaghan was forced to call on the International Monetary Fund for a multibillion-pound bail-out in an attempt to bolster Britain's flagging economy.

The Labour government's tiny majority was wiped out by early 1977 as a result of by-election defeats, and Callaghan managed to form a coalition with the Liberals to hang onto power.

The pact concluded in the summer of 1978, by which time economic growth had picked up (although unemployment now stood at a postwar high of 1,500,000), and opinion polls suggested that Labour could form a majority government if a general election was held.

The loss of shipbuilding jobs devastated port cities such as Malmö, home to Kockums' shipyard, which would struggle for the next 20 years.

[16] Some newly industrialized countries saw some diversionary benefits from the crisis, namely Spain, Korea, Taiwan, Singapore, Mexico, and Brazil, as their low-cost environments attracted new investments and gave their products a competitive edge over competitors in higher-cost, developed countries suffering from higher energy costs.

The Federal Reserve adjusted its mandate as a result, believing that the inflation-unemployment tradeoff was much higher than previously thought, and established a 6% target as full employment.