An extract from the Cabinet minutes, 16 November 1967

By November 1967, financial pressure on the UK government had become overwhelming. On 16 November the Chancellor of the Exchequer, James Callaghan, with Wilson’s backing, recommended to the Cabinet that sterling should be devalued by just under 15 per cent. This was agreed and then implemented, at 14 per cent on 18 November. A package of measures including defence cuts, restrictions on hire purchase (credit), and higher interest rates was also agreed.

There was a forlorn tone to Callaghan’s proposal to the Cabinet, and at the end of November he moved to the Home Office, to be replaced as Chancellor by Roy Jenkins. In a famous broadcast, Wilson informed the nation that ‘the pound in your pocket’ had not been devalued, a controversial claim which appeared to ignore the fact that imports would become more expensive.