@Easy-Kill -
I think the point you should remember is that merchant ship losses were already high and the British economy was suffering.
Firstly, apologies for the slow reply I have taken on a few too many jobs recently
I am not sure why you believe that the British economy was 'suffering'. In the first instance, British imports had increased year on year during the war [1]:
Code:
Imports (£m)
1914, 1915, 1916, 1917, 1918
-696 -852 -949 -1,064 -1,316
While the British economy grew substantially over the course of the war (matching the growth of the USA), and was the only great power at war whose economy grew [2].
Code:
UK USA Germany Austria Russia France
1913 100 100 100 100 100 100
1914 92.3 101.0 85.2 83.5 94.5 92.9
1915 94.9 109.1 80.9 77.4 95.5 91.0
1916 108.0 111.5 81.7 76.5 79.8 95.6
1917 105.3 112.5 81.8 74.8 67.7 81.0
1918 114.8 113.2 81.8 73.3 … 63.9
Germany's economy was shrinking while the British economy was growing and that was not even including India.
What Britain was doing, was spending vast sums of money. However, the UK never spent as much as any of the other great powers on its war. In 1939, 59% of German government spending was devoted to the war, while Britain was spending the lowest of the great power belligerents with only 37.1 % [2]. British Government debt was high, but again, this must be viewed in relation to the other great-power belligerents - see below from [3]
Code:
Year U.K. France Germany
1914 61.3 54.8 73.5
1915 79.8 79.4 94.4
1916 75.0 86.6 92.7
1917 76.1 86.1 90.8
1918 69.2 80.0 93.8
What we see is that if the UK economy was struggling, the rest the major belligerents were on the verge of collapse ... yet they weren't and the war continued. The UK was in a far more prosperous and stable position, where the war was greatly benefiting its economy - that is, far from struggling it was growing at a rate that would be considered fantastic by modern standards.
It is also important to note that most of the German escorts were still coal fired and had no opportunity to 'replenish at sea', meaning their operational range barely extended out of the North Sea. If the High Seas does attempt to sally into the Atlantic, it does so without an effective escort and instead as over-priced surface raiders. Given that the largest trading ports in the UK in this period were in Mersyside and the Solent, it is difficult to understand how the German High Seas fleet is going to have such a war winning affect on the British Economy.
But Jutland shows that the British battlecruisers, at least, were vulnerable and could be sunk with little effort.
There have been many theories as to why the British battle cruisers were destroyed while few of the German ships were. The most likely of which is a combination of the British ships being silhouetted against the mist, being in unfavorable position due to weather (and the need to 'catch' the enemy who was withdrawing) and the well known practice of not closing magazine doors to speed gunnery fire. I would hardly be so quick to flippantly dismiss the fighting potency of any ship, and I suspect the German admiralty to not be so dismissive either. After all Scheer made a not one, but two 'battle about turn' manouvre - indicating the skill of both from Admiral to deck hand on sides in the battle.
The single greatest concern for the Admiralty was German interference with shipping to the BEF. The idea that a battlecruiser squadron (or even light cruisers) could raid that shipping had given the Royal Navy ulcers in 1914 and would again in the wake of a defeat. British public opinion after a defeat at Jutland would have been both outraged and panicked. They had in the past literally court-martialed, ostracized or hung admirals for less (Byng, famously, but also Milne of recent memory). In this environment, the admiral in charge of the Grand Fleet - likely not Jellicoe or Beatty anymore - would have been under enormous pressure to secure a decisive victory and to do it with much reduced means. A daring stroke or two - more German battlecruiser raids on coastal towns, or into the Thames estuary or the Channel, raids which a British fleet without battlecruisers could not intercept or stop - and the Admiralty and public would be in full panic. An invasion does not have to be credible to us with the benefit of hindsight (think about how long it would take to assemble troops) for the threat of it to move a nation to panic. Look at the public reaction after the shelling of the coastal towns and the outrage after Jutland - and imagine it after a thorough British defeat at sea.
Yet, the loss of the British Grand Fleet would not have a profound effect on shipping across the English Channel - Battleships of the era tended to have huge turning circles (800-900m), which tend not to lend themselves very well to large naval flotillas trying to maneuver. Indeed, one of the biggest threats to Battleships was the Torpedo screens launched by destroyers - the very thing which caused Jellicoe to break off his pursuit after Jutland. If the High Seas fleet sails into the Channel, it will very quickly end badly (remember, the entrance to the channel is just 19 miles across). This would very much be a cruiser-destroyer action and Britain had substantially more (using 1914 numbers):
Armored Cruisers: 34vs8
Protected Cruisers 52vs17
Scout Cruisers 15v0
Light Cruisers 20v16
Destroyers 221v90
Even defeating the Grand Fleet at Jutland so badly that it never leaves Scapa again, Germany still has to solve the issue of Cruiser/Destroyer disparity to have an effect on British Shipping of troops and war material to France (it may have limited volume by shipping only at night perhaps). Remember, for this exact reason, no British Battleships were assigned to the Channel or Dover flotillas.
British capital ship construction had virtually ceased, other than completing vessels already laid down. After a Jutland defeat, capital ship construction would be kicked into high gear and Army projects like artillery, tanks and machine guns would all be have to be shorted or halted. That means an end to any significant BEF operations for a year or more.
During the War, Britain completed 13 Battleships and 1 Battlecruiser (if I am not mistaken). By Contrast, at the outbreak of war, Germany had 15 battleships. That is, Britain could trade 1 for 1 with battleships and still maintain its pre-war advantage (well Germany was making 5 herself). I don't have the exact figures, but the allocation of steel for munitions and factory construction (i.e. this was part of what caused the 15% growth in GDP) absolutely drwarfed Battleship construction.
I personally believe you are selling a pessimistic picture without fully accounting for the fact that the Royal Navy could absorb substantial losses, the British Economy was better able to absorb the effects of any counter blockade, and Germany could never impose a blockade of such completeness that the Royal Navy imposed on it (simple geography and economics). I don't believe that Germany victory at Jutland would have done nothing more than allow the High Seas Fleet to attain local control over the North Sea. The North Sea only allowed the Allies to impose a distant and rather effective blockade on Germany. The Cruisers and Destroyers were the backbone of the fleet that allowed the Royal Navy to enact that blockade and when the German Navy starts to use battleships to escort convoys (without effective destroyer escorts) they will simply become targets for the Royal Navy's submarines.
[1] THE UNITED KINGDOM DURING WORLD WAR I: BUSINESS AS USUAL? Stephen Broadberry
[2] THE ECONOMICS OF WORLD WAR I: A COMPARATIVE QUANTITATIVE ANALYSIS Stephen Broadberry, Mark Harrison.
[3] War Finance (Germany), Stephen Gross.
