Why Hood's planned reconstruction was financially plausible

Was refitting Hood still worthwhile and affordable before the Second World War?

Yes. The reconstruction was budgeted and economically feasible, though it competed for capacity and political priority with wider British rearmament.

Britain's late-1930s economy could fund Hood's refit, and the work was already budgeted. The Royal Navy was simultaneously building King George V-class battleships, beginning the Lions, modernising older capital ships, expanding destroyer and carrier forces, and developing aircraft. Naval spending nevertheless competed with major army and Royal Air Force programmes. The limit was a government seeking deterrence without paying immediately for the full scale of a coming war, rather than a simple absence of money for Hood.