There were three main phases of monetary policy in Britain in the period between the end of the Second World War and the adoption of Competition and Credit Control in 1971. The first was the era of cheap money, during which the government tried to hold down interest rates in order to encourage investment in reconstruction and enhancement of industrial capacity. The second phase began in 1951 when an increase in bank rate re-activated monetary policy as an instrument of domestic-demand management, and a series of controls was exercised through the banking system. The third phase of policy was in the 1960s. After a brief period in which all constraints had been relaxed, there was a return to controls, guidance and official intervention. There developed in this decade, however, a realisation that targeting the British clearing banks alone was an ineffective way to control domestic demand, but the inflationary, balance-of-payments and current-account pressures of the period were such that the authorities were unable to think their way out of the problem. From the mid 1960s, the Bank of England in particular became convinced that the policy of ‘leaning into the wind’ (purchasing gilts in the securities market) allowed them to stabilise domestic monetary conditions.