Having fielded arms on land and sea and in the air against Axis might, the British Empire figured prominently in 1945 among Allied victors. The cost to Britain had been immense, however. The empire was declining, as shown by all major indices in 1945. The House of Commons in October extended wartime emergency power for five years to Clement Attlee's Labour government. The economic crisis, sparked by the spending of reserves on wartime expenditures, could not otherwise have been surmounted. In December the United States granted an emergency loan of $3.75 billion to Britain to stave off bankruptcy, supplemented by a Canadian loan of $1.25 billion. Two years later, India, jewel of the empire, acquired independence. Two hundred years of British rule on the subcontinent thus ended and set in train future imperial departures from the Middle East, Africa, East Asia.

Great Britain's most trying year in the war stretched between the collapse of France and Hitler's 1941 assault on the USSR. Unaided by effectual allies, British forces during that time could not reduce Germany's dominant position in Europe. Luftwaffe bombers plastered British cities. Submarines and surface raiders nearly strangled the country's maritime lifeline to the wider world. Berlin's military planners studied ways to conquer and occupy the isles. American navy destroyers – swapped in September 1940 for ninety-nine year leases on British bases in the New World – helped only slightly to alleviate pressure on the United Kingdom. Of the fifty pledged warships, all of World War vintage, London had taken possession of only nine by the end of 1940. Lend-Lease did ultimately provide tangible aid to the British Empire, valued between $21 and $25 billion. Yet the question stood in 1941: Would enough Lend-Lease supplies arrive in time? As for the German invasion of Soviet Russia, London's military and civilian leaders perceived a respite, but most felt that the Red Army must crumble. Hitler's fury subsequently would be redirected against Britons. Thus they were obliged to live in continuing suspense of a German cross-Channel invasion and waged mainly rearguard operations.