British confidence in investment had taken another blow. Overseas investment and foreign trade no longer seemed so safe. The destruction of the Mediterranean Fleet had prompted British insurance companies to raise their premiums, while banks had grown more cautious about lending to shipping companies and raised interest rates as well.
This drove up costs across Britain's entire shipping industry. Higher shipping costs would inevitably mean either losing their price advantage or seeing profits shrink.
Either outcome would affect Britain's shipping industry itself and weaken its competitiveness. Shipping was Britain's core competitive strength; a decline in its competitiveness was no trifling matter.
Yet credibility was not something that could be restored overnight, while losing it required no great effort at all.
Textiles and grain were also hit hard. Britain's textile industry was going through its most painful era: the Russian and United States markets had closed, while the Indian Subcontinent was in the throes of revolution.
And cotton prices happened to be at perhaps their lowest in recent years, since after losing Britain—the major buyer—other countries had not yet had time to adjust.
Britain could only use the still-unstable United States as a dumping ground for its goods. This made the factory owners in the American North feel as though they had been played, and they began protesting one after another.
But their protests were useless. The guns were still in British hands—how could they allow those Americans to run wild?
The grain problem was even more serious for Britain at this time. Russia and the United States had always been Britain's two main sources of imported grain.
Yet Britain had been at war with both nations for some time, leaving it no choice but to import more expensive grain from other countries.
Naturally, bread made from this costly grain was