During the early months of the war, Britain employed its naval superiority to keep the sea-lanes open and impose an economic blockade of the Central Powers. The German Navy could not break the blockade, but it could damage Britain's sea-borne trade with a new weapon, the submarine, or U-boat. To cope with the growing submarine menace, the Admiralty relied on a series of countermeasures. It organized naval patrols to hunt for submarines and detailed destroyers and small craft to guard the routes used by merchant ships; it armed merchantmen, employed nets and mines, and introduced depth charges and detecting instruments known as hydrophones. But for the whole of 1916 the British navy managed to sink only 15 U-boats, small inroads into a force that had increased to 140 by year's end. At the same time, German submarines were sinking merchant ships at a rate faster than the capacity of British shipyards to provide replacements. Walter Runciman, president of the Board of Trade, warned the War Committee on November 9, 1916 that if losses continued at the present pace, there would be a complete breakdown in shipping.

The lack of success against submarines cast doubt on the whole conduct of naval affairs and led to changes at the Admiralty during the last month of the Asquith administration, with Jellicoe leaving the Grand Fleet to take over the duties of First Sea Lord.