On 13 July, while Keynes was on the high seas, sterling came under pressure on the foreign exchanges, as the financial crisis which had affected Austria, Germany and Central Europe made its effects felt on London. The same day, the Report of the Macmillan Committee on Finance and Industry with its estimates of Britain's large short-term net debtor position appeared. The Bank of England lost gold until 23 July without changing Bank rate, which it then moved to 3½ per cent. A week later, with the agreement of credits to the Bank of England from the Bank of France and the Federal Reserve System of $125 million, Bank rate rose to 4½ per cent. The same day Parliament adjourned without discussing the Report of the Committee on National Expenditure chaired by Sir George May. The May Committee, formed by the Government the previous February, forecast a Budget deficit of £120 million and recommended cuts of £97 million in Government expenditure, including a reduction in the unemployment benefit of 20 per cent.

On the following Sunday the Prime Minister, who had retired to his home at Lossiemouth, wrote to Keynes.

From J. RAMSAY MACDONALD, 2 August 1931

My dear Keynes,

I am up here a little bit isolated, but I shall be exceedingly grateful to you if you will send me anything that you may write on the [May] Economy Committee's Report, as I should like very much to have your views for my guidance. […]