In reply to Rog Wilko:
I'd imagine mainly to slow down northbound traffic coming into Keswick down the long hill. You do wish they could put asymmetric speed limits in places like this though, accelerating up the hill away from town is obviously different from barrelling down it into the houses.
(The 40-limit along Thirlmere since the road re-opened also seems frustratingly inappropriate - its fair enough on the twisty bit from Wythburn church up to Dunmail but really should be 50 along the lake.)