The First World War demonstrated that economic and political power were inseparable. Just as economic resources were crucial to the military effort, so war could be used to advance the economic interests of the belligerents. In Britain, the immediate problem of enforcing the blockade of the Central Powers became overlaid with that of meeting the long-term challenge of German industry. From 1916 onwards, attempts were made to supplant German trade in markets where it had traditionally been dominant. Remarkable and sometimes ruthless efforts were made in the years 1918–21 to convert Britain's temporary commercial predominance, the result of abnormal postwar conditions, into something more permanent. The Nordic countries were a particular object of British interest as traditional German markets which had a strong growth potential in their own right, but they were also regarded as a transit route to the much larger market opportunities that were expected to materialise in post-revolutionary Russia.

By 1921 the impetus had waned and the British economy had relapsed into stagnation. But this early post-war phase foreshadowed the radical shift of policy which followed the abandonment of the gold standard and the adoption of tariff protection in 1931–2. This time there was a far more systematic employment of state power, through tariffs and trade bargaining, but again the Nordic countries were among the principal objects of attention. The depreciation of sterling, together with the bilateral trade agreements concluded in 1933 with Denmark, Norway, Sweden and Finland, helped to make Scandinavia one of Britain's most important export markets by the mid-1930s. Achieved at a time of German weakness, this success was, however, to be undermined by the revival of German competition after 1933.