The monetary trap that drove the British out of Suez: 70 years since the Sinai War

70 years since the Sinai War: the article reveals how monetary pressure on the pound forced Britain to withdraw from Suez in December 1956. The US exploited Britain's dependence on dollars to force a withdrawal in exchange for financial aid and a guarantee of oil supplies.

70 years since the Sinai War, the article reveals an economic angle forgotten from Israeli memory: the monetary trap that forced Britain to withdraw from Suez. In December 1956, after the ceasefire, British forces remained in the canal zone, but pressure on the pound forced London to leave. Britain needed dollars to defend the fixed exchange rate against the dollar ($2.80 per pound), set under the Bretton Woods agreements. Britain's gold and dollar reserves fell from $2.4 billion at the end of July to less than $2 billion in November, losing about $400 million that month. The US, furious that the military operation was not coordinated with it, exploited British dependence to force a withdrawal in exchange for financial aid and a guarantee of oil supplies. The article describes how Britain chose not to devalue the pound for fear of harming the sterling bloc and the Commonwealth, thus limiting its room for maneuver against American pressure.