The 12th and 13th centuries saw a huge development of the English economy. This was partially driven by the growth in the population from around 1.5 million at the time of the creation of the Domesday Book in 1086 to between 4 and 5 million in 1300. England remained a primarily agricultural economy, with the rights of major landowners and the duties of serfs increasingly enshrined in English law. More land, much of it at the expense of the royal forests, was brought into production to feed the growing population or to produce wool for export to Europe. Many hundreds of new towns, some of them planned, sprung up across England, supporting the creation of guilds, charter fairs and other important medieval institutions. The descendants of the Jewish financiers who had first come to England with William the Conqueror played a significant role in the growing economy, along with the new Cistercian and Augustinian religious orders that came to become major players in the wool trade of the north. Mining increased in England, with the silver boom of the 12th century helping to fuel a fast-expanding currency.
Economic growth began to falter by the end of the 13th century, owing to a combination of over-population, land shortages and depleted soils. The loss of life in the Great Famine of 1315–17 shook the English economy severely and population growth ceased; the first outbreak of the Black Death in 1348 then killed around half the English population, with major implications for the post-plague economy. The agricultural sector shrank, with higher wages, lower prices and shrinking profits leading to the final demise of the old demesne system and the advent of the modern farming system of cash rents for lands. The Peasants Revolt of 1381 shook the older feudal order and limited the levels of royal taxation considerably for a century to come. The 15th century saw the growth of the English cloth industry and the establishment of a new class of international English merchant, increasingly based in London and the South-West, prospering at the expense of the older, shrinking economy of the eastern towns. These new trading systems brought about the end of many of the international fairs and the rise of the chartered company. Together with improvements in metalworking and shipbuilding, this represents the end of the medieval economy, and the beginnings of the early modern period in English economics.
William the Conqueror invaded England in 1066, defeating the Anglo-Saxon King Harold Godwinson at the Battle of Hastings and placing the country under Norman rule. This campaign was followed by fierce military operations known as the Harrying of the North in 1069–70, extending Norman authority across the north of England. William's system of government was broadly feudal in that the right to possess land was linked to service to the king, but in many other ways the invasion did little to alter the nature of the English economy. Most of the damage done in the invasion was in the north and the west of England, some of it still recorded as "wasteland" in 1086. Many of the key features of the English agricultural and financial system remained in place in the decades immediately after the conquest.
Agriculture formed the bulk of the English economy at the time of the Norman invasion. Twenty years after the invasion, 35% of England was covered in arable land, 25% was put to pasture, 15% was covered by woodlands and the remaining 25% was predominantly moorland, fens and heaths. Wheat formed the single most important arable crop, but rye, barley and oats were also cultivated extensively. In the more fertile parts of the country, such as the Thames valley, the Midlands and the east of England, legumes and beans were also cultivated. Sheep, cattle, oxen and pigs were kept on English holdings, although most of these breeds were much smaller than modern equivalents and most would have been slaughtered in winter.
In the century prior to the Norman invasion, England's great estates, owned by the king, bishops, monasteries and thegns, had been slowly broken up as a consequence of inheritance, wills, marriage settlements or church purchases. Most of the smaller landowning nobility lived on their properties and managed their own estates. The pre-Norman landscape had seen a trend away from isolated hamlets and towards larger villages engaged in arable cultivation in a band running north–south across England. These new villages had adopted an open field system in which fields were divided into small strips of land, individually owned, with crops rotated between the field each year and the local woodlands and other common lands carefully managed. Agricultural land on a manor was divided between some fields that the landowner would manage and cultivate directly, called demesne land, and the majority of the fields that would be cultivated by local peasants, who would pay rent to the landowner either through agricultural labour on the lord's demesne fields or through cash or produce. Around 6,000 watermills of varying power and efficiency had been built in order to grind flour, freeing up peasant labour for other more productive agricultural tasks. The early English economy was not a subsistence economy and many crops were grown by peasant farmers for sale to the early English towns.