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Thumbs up from the IMF

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Stephanie Flanders | 15:16 UK time, Monday, 27 September 2010

It couldn't be better timing for George Osborne. On the day that Labour's old and new guard debate just how outraged to be about the government's deficit plans, the IMF has given them a resounding thumbs up.

IMF staff come over to London every year to give the country an economic health check. Here are the sentences from the concluding report that we can expect Mr Osborne to be returning to in the coming weeks:

"The government's strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability. The plan greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery. Fiscal tightening will dampen short-term growth but not stop it as other sectors of the economy emerge as drivers of recovery, supported by continued monetary stimulus."

In the body of the report, the staff warm to their theme, and make clear that they consider Mr Osborne's plans an improvement on Alistair Darling's. Specifically, they say, with surprisingly few caveats, that the benefits of the tougher deficit plan:

"outweigh the expected costs in terms of adverse effects on near-term growth. Indeed, market reaction to the adjustment plan has been positive."

In other words, the coalition have taken an economic risk with their approach, but the IMF thinks it's a risk worth taking. Like Mr Osborne, they also believe that the "automatic stabilisers" - the automatic increase in spending, and fall in tax revenues, that occurs with a slowdown in the economy - are an adequate Plan B, assuming that the Bank of England is able to keep rates low. According to the report:

"this provides an important safeguard even as structural consolidation continues."

It is safe to say that Ed Balls will not change his mind on the basis of reading this report. Neither - I suspect - will anyone else appearing on the stage in Manchester this week. But in the public relations battle over the deficit, Mr Osborne's team has won an important, and surprisingly unqualified, endorsement.

Update 1705: You might deduce from the chancellor's response to this report that the UK was previously on the IMF equivalent to the naughty step. That is not quite right. The last time that the staff carried out a similar exercise, in May 2009, their report was quite low-key in its criticism of the government, which was mixed with a fair amount of praise.

It was highly positive about the government's response to the crisis, and accepted that the rise in borrowing had been a more or less inevitable consequence of the crisis.

However, the staff emphasised that confidence in the sustainability of the public finances would be crucial to the government's plans - and that this "would be strengthened" by "targeting a more ambitious medium-term fiscal adjustment path for implementation once the economic recovery is established. The focus of this adjustment profile should be to put public debt on a firmly downward path faster than envisaged in the 2009 Budget."

The report also said that the government should be clearer about what it was going to cut - advice it explicitly chose not to follow when it decided to postpone the comprehensive spending review. The Fund's criticism was repeated in later reports about the global economy.

So yes, the IMF is giving Mr Osborne higher marks than Mr Darling. But it had never suggested that he was sending the UK over a cliff.


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  • Comment number 1.

    In the interests of journalistic balance may we have a critique of the IMF track record if we look back at their reports over let's say since they helped us out last time?

  • Comment number 2.

    I'm sure my dad would consider my overdraft too high. But to be honest when he agrees with me I realise I'm being too cautious. The IMF do not have to live with the consequences of these savage cuts so of course they think they're a great idea. I'm watching my business slowly decreasing in size because my customers are not able to invest and cash supplies are running out.

    Economic UK armageddon is just around the corner and Osborne will be to blame. No one else.

  • Comment number 3.

    Smugness about cutting the deficit bodes really ill for the real economy and our real competitiveness.

    The real problem for the British economy is NOT public debt, but the absurdly high level of private debt and the very poor quality of some of that debt - this will destabilise the banking system if it is not tackled in a timely manner. We need a rational and progressive plan to raise interest rates and we need to start NOW.

  • Comment number 4.

    "Fiscal tightening will dampen short-term growth but not stop it as other sectors of the economy emerge as drivers of recovery, supported by continued monetary stimulus."

    How in Gordon's name does fiscal tigtening not affect other sectors of the economy becoming drivers of the recovery for the worse?

    Hogwash !

  • Comment number 5.

    These are the same people who saw no problem with derivatives, hedge-funds, etc., in funding the housing market.
    A big thumbs up for passing the debt of the bankers onto the public. Seems a likely conclusion by the financial industry.
    The position is one of making sure that the financial markets are supported by taxes on the public and cuts in services. Individual disadvantages and sufferings are not a factor to be considered. It is looking at the long term growth of financial services and not the internal well-being of the people. Banks and financial services have been positioned as a divine part of the national structure and therefore support is a product of belief that cannot be challenged. This is the new secular church and like a church, it offers rewards in the future for the suffering of today..and like the church it will ignore unethical behaviors. At least the church compensated the victims...the banks have no such plans.

  • Comment number 6.

    So why when the head of Unite was on today telling everyone that the whole plan was wrong, did no-one think to ask him what he based this on?

    It is time these people are challenged on their "Cuts are wrong" agenda, rather than simply allowed to spout it, with the interviewer accepting it as fact.

    Someone is talking about balanced journalism. First we need some journalism. Rule 1: Don't just take people's views as correct, because they agree with yours.

  • Comment number 7.

    They also suggest that UK Unemployment has stabilised, well until the spending review cuts thousands of Public sector workers jobs! Have the IMF (or BBC pundits) considered the effect of the 800,000 public sector workers (plus the estimated 700,000 private sector follow on job losses) on the UK economy, or is that too advanced for anyone in the present government or media too scared to be seen as being anti-coalition government (guess the bbc want to aviod another wrist slapping visit to Number 10).

  • Comment number 8.


    I hope that you will remind Labour spokesmen of the IMF report whenever they repeat their snake-oil solutions.

    I hope that other reporters also read the IMF report. It might shatter a few left-wing preconceptions within the BBC.

  • Comment number 9.

    'It is safe to say that Ed Balls will not change his mind on the basis of reading this report.'

    He won't change his mind because he already knows the coalition cuts are the right thing for the country. His public stance has nothing to do with economics and everything to do with cheap political opportunism.

  • Comment number 10.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 11.

    What its says is that there is a risk that the economy will grow less fast and maybe even decline into recession. But if the latter happens the Bank will be able to borrow some more, if interests rates remain low. Plan B is therefore digging us out of a double dip.

    In fact there are some signs of expansion in the private sector but the risk is it will fade under the pressure of lost markets from state purchases and lower retail sales as a result of falling consumer incomes, alongside uncertain export markets especially in the USA.

    Incidentally it would be nice to have a link to the report to inform the usually intelligent discussion here.

    But all this was true of Darling.s policy as well. The risk is enhanced by the speed of the cuts and the political commitment to the 'smaller state'

  • Comment number 12.

    "I'm Stephanie Flanders, the BBC's economics editor."
    Shouldn't that read "BBC's political editor."?

    On another note, Keynesian £100 debt for £10 growth would work a lot better right? Or take the US approach of completely destroying the value of the currency. Currency devaluation is just a way of cutting without using the word cuts.

    Maybe it's time people woke up and realised you can't just borrow forever? Or is every economist just some Keynesian preacher these days? Growth isn't the be all and end all, and it would be worth taking a 5% hit if we could shrink our debt significantly. Sadly we need individuals to follow the governments lead.

  • Comment number 13.

    Wow the reds are out in force today! #1 thru #3 out of 4 all written in red ink.

    The IMF are our creditors and as such they have a vested interest in seeing us do the right thing from a politically neutral perspective, because their objective is to maximise the chances of us repaying our debt to them.

    It really is that simple, even if it isn't what the tribal reds want to hear.

    Brown formulated current Labour policy because he knew he couldn't win an election on the back of presiding over financial meltdown AND imposing austerity measures in the same period, so offering people a chance to vote for "don't cut now, cut later" was the best he could do in terms of election strategy.

    However, as a policy for doing what's right it showed disgraceful disregard for the welfare of this country and the IMF are telling us that today.

  • Comment number 14.

    'Couldn't be better timing' indeed. Suspiciously good timing. Be honest Stephanie, the IMF is not politically neutral and never has been. The BBC's coverage of the IMF 'report' is full of vague and wooly language, which if it reflects the actual content of the report would lead me to wonder how it ever got out the door. IMF economics as vague and impressive sounding propaganda noises to make everyone in the markets feel that everything is working out just fine and dandy and there's nothing to go wrong. Not going to wash is it?

  • Comment number 15.

    I think that you will find that economists will look at both public and private debt. Yes the record of the IMF in recent times has been patchy. I too am nervous of the social costs of cust in public services, firstly will the proposed cuts actually deliver the cut in the deficit that the government projects ? - there is huge execution risk but secondly, I am not certain that we have a lot of choice. With interest rates at record lows, the government is still spending £1 in every £4 of tax revenue collected just on servicing existing debt. So if if interest rates were to double without a cutting of the deficit. The debt burden could quickly become completely unsustainable. The harsh truth is that global competitive pressures have redeuced the cost of labour (employment opportunities in the UK) but increased global demand for the world's resources. This is an impoverishing scenario which takes greater courage to face than that displayed by any of the major political parties.

    It is very sad, the public spending from which some have benefited in the last 12 years, was built on false prosperity (rising public and private debt)/ pumped up tax revunues from the fincial sector and the housing/debt bubble. It is a grim picture, but the sooner it is understood and addressed, the sooner things can improve but I still think that major improvements will take 10 years plus to achieve.

  • Comment number 16.

    As noted by others, the IMF may not have a great track record for predicting the right outcome but at least they are the closest we have to a vaguely independent view point. The BBC should always sit on the fence and so cannot truly comment. Politicians from either side will either welcome or dismiss this report but from whom else can you get a true assessment of the options? I’m not an expert in government finance and I want to be able to get a clear unbiased view of what the government is doing on my behalf.
    If the IMF is agreeing with the government then that is a big plus. If anyone can point to another truly independent, credible report that disagrees then that would warrant some thought, but then as Miss Flanders has pointed out on numerous occasions government economic policy is not easy!

  • Comment number 17.

    10. At 4:25pm on 27 Sep 2010, jobsagoodin

    Classy guy

  • Comment number 18.

    1. At 3:44pm on 27 Sep 2010, Kit Green wrote:
    In the interests of journalistic balance may we have a critique of the IMF track record if we look back at their reports over let's say since they helped us out last time?


    In other words because the IMF agree with the coalitions plans to reduce the deficit they must be wrong eh? Typical blinkered thinking from the left! Would you have doubted the IMF if they had agreed with Alistair Darling or any of the other Labour refuseniks? No I thought not!

  • Comment number 19.

    12. At 4:26pm on 27 Sep 2010, dj_gandy wrote:
    "I'm Stephanie Flanders, the BBC's economics editor."
    Shouldn't that read "BBC's political editor."?


    Shock news. BBC journalist accused of right-wing bias! Whatever next.

  • Comment number 20.

    Morpheus @ #4

    I couldn't agree more!

    What other sectors are going to emerge? If there are other sectors that can drive growth, why haven't they been doing so up to now?

    Until someone explains where they expect the growth to come from, how and why, these pronouncements are just wishful thinking.

    All they are offering is a "continued monetary stimulus" which I take to mean low interest rates (unless they expect QE to resume) but these can only stimulate the economy if they are passed on: and there's no sign of that happening.

  • Comment number 21.

    13. At 4:30pm on 27 Sep 2010, chris911t

    The Gordons in my quote referred to the Gin troll.

  • Comment number 22.

    In the interests of balanced reporting, would it be possible for you to include some context in your report? Appropriate context might include that the IMF has a notoriously monetarist agenda, and would be expected to support savage cuts in public spending in order reduce the deficit.

  • Comment number 23.

    Anyone with any common sense can see that the economy is on the way down. The IMF are bankers aren't they. Did they warn of the problems ahead? - no. Very convenient too to publish the report as labour were discussing the enconomy. I think their sympathies lie with the Coalition. I'd like to wait and see what happens and look a bit more widely. Why should the deficit caused by them be the only priority of the goverment. What about the unemployment caused by the savage cuts? Only the bankers views are being heard, and it's their mess we are all sinking in.

  • Comment number 24.

    Well come on the oracles at the IMF how will we grow when a substantial part of the spending economy will be worried about their jobs and savings and benefits. Export lead? may be if the Chinese forget how to make £20 DVD players and revalue their currency by 30%.
    We should thank the Irish for conducting a severe austerity experiment on themselves the results of which should be evident about the time the CSR measures kick in!

  • Comment number 25.

    The IMF have got it wrong before. I didn't see them forecast the Irish double dip into recession. I doubt they've got it wrong again. But the media pack of there, taking the limelight from the labour party's new leader. Give him a chance to make his policy - he's only JUST been given the job.

  • Comment number 26.

    6. At 4:12pm on 27 Sep 2010, Peter Johnston

    Perhaps they are reading some of these and the very many more like them. The requirement to hard right now is one very specific view based on the modle that the IMF use.

  • Comment number 27.

    In response to most of the comments above; it seems clear that whoever think the cuts are a bad idea bring up the IMFs poor record, and whoever think they are a good idea is chirping about how they are right because they now have the IMF on their side.

    The fact is that it doesn't matter what any of the politicians, the IMF, journalists think, as it's all based on some rather shaky conjecture. No one knows how the economy will cope until after it has happened. Of course then whoever was right will be singing their own praises, even though they essentially got lucky.

    What I'm more concerned about is why both political parties seem to have universal agreement within the parties themselves. With the hundreds of them, how is it that pretty much all conservatives think cuts are good, and all labour members think the cuts are bad? Of course the answer to this is simple - they are simply failing into place in order to not upset the rest of the party. But who is it that dictates the overall parties opinion which they must all then follow? This is just a perfect example of how our country is not even run by the people we vote in, it is run by the silent few who dictate to the politicians what their policies must be.

  • Comment number 28.

    18. At 4:42pm on 27 Sep 2010, Richard wrote:
    1. At 3:44pm on 27 Sep 2010, Kit Green wrote:

    In other words because the IMF agree with the coalitions plans to reduce the deficit they must be wrong eh? Typical blinkered thinking from the left!
    Did I say I disagree with it? I am not on the left, I am hardly political. This is an economics blog.
    I just want to genuinely know their track record, as I would with any organisation's report presented to us.

  • Comment number 29.

    The IMF always promotes cuts in public spending, tax reductions on business and privatisation of public utilities, so what's new?

  • Comment number 30.

    Whilst I'm very much for the cuts, my prime concern is *what* will get cut - there is plenty of chaff to get rid of, but given how government works I fear quite a lot of the wheat will be removed instead due to the nature of the public sector and how certain managerial figures like to maintain their little empires.

    As for unemployment from the public sector - tough. They've had it good for a long time now, their wages are now greater than the private sector with an awful lot less productivity (not always the employees fault, managerial incompetence often hamstrings talented and valuable staff).

    It would be nice to see some radical thinking coming out of the coalition as well, including subsidizing British workers wages in order to give them a cost advantage over economic migrants in some areas. It wouldn't affect high skilled areas, but in low and medium skills it would give the natives a fighting chance to get on the employment ladder.

    I'd also like to see what the hell is happening with PPI, the repayments are crushing the life out of a lot of budgets and since we now 'own' a large amount of those debts they need to be written off as part of those part-nationalized banks repayment to the taxpayer.

    I have much more confidence in the coalition than Labour to get things right, although given I have zero confidence in Labour that is something of a backhanded compliment.

  • Comment number 31.

    We're all doomed!

  • Comment number 32.

    re: jobsagoodin's derogatory remarks

    Presume you're a banker?

    Not sure this is the forum for wishing the downfall of my business but thanks for your derogatory remarks. My business only employs 120 staff after all servicing the home-building (primarily affordable) sector. I'm sure the banks who are on a stupendous climb into the black will live with local developers going bust on a daily basis.

    In future add to the debate if you can. If you can't don't bother.

  • Comment number 33.

    I see that the reds are out in force.

    Clearly they have decided that any economist who does not subscribe unquestioning to Keynesian economics (or anything more left wing) must be a right wing stooge of the govt.

    I assume you also laud Nick Robinson as a paragon of impartiality.

    personally I found Stephanie to be reasonably balanced although I suspect her personal economic views tend to more monetarist based. But it would be rather difficult to have an economics editor without an economics background, and anyone who has that background will have their own opinions on what economic theories they believe to more credible than others. Stephanie does try and keep her blog reasonably even handed.

    Anyhow back to the news story. IMF is great at predictions but whether any of them will prove to be accurate can only be judged after the event. If the economy is still growing at around 2% pa this time next year then we can at least say the govt policy was not economically wrong - of course that still leaves the questions of whether it was socially unjust and whether other policies which were more socially just would have been more successful.

    John-from-Hendon: it seems that individuals are listening to you and repaying their personal debt. If they keep doing this maybe the rebalancing you have asked for is coming rather quicker than expected

  • Comment number 34.

    Why should we be listening to the IMF who have been cheerleaders for the financial deregulation that has resulted in the increased volatility and frequency of financial crises over the last twenty years.

    In the Asian currency crisis of the late 90s the country that did best was Malaysia - as they ignored advice of IMF which was to let their currency float. Others that took IMF advice got into a lot more trouble

    See story below

    Another example is Argentina - which took IMF advice and jumped straight in with the free-market/privatisation orthodoxy - this also resulted in disaster.

  • Comment number 35.

    Osborne doesn't seem to learn from Ireland and the effect of savage austerity cuts there. Infact, he wants to lead us down the same path!

  • Comment number 36.

    The IMF and their austerity measures: see link below.

  • Comment number 37.

    2% growth in 2011 and a medium term average of 2.5% after that. Where do they get these numbers from? Pure wishful thinking plucked out of thin air economics.

    If we provide some of the funding for the IMF I say there's a cut that can be made to get rid of some non-jobs for a start.

    We have over consumed and over borrowed, we have to deflate our bubble economy, end of story.

    To think that cutting 25% from government departments won't lead to a large reduction in consumptive spending is just non-sensical. The biggest cost of any government department is staff. This means staff will have to go in large numbers (or work much reduced hours to fudge the unemployment statistics).

    These staff unemployed or on lower earnings will spend a lot less on private sector goods and services as will the departments they work for. Hence spending in the economy will fall significantly and recession will naturally follow.

    Export led recovery? Pull the other one?

  • Comment number 38.

    The ‘Banks’ created too much money secured against promises to pay that were worthless.

    Now we (the state) are being coerced into making good those ‘promises to pay’ so that the same institutions that fouled up in such a dramatic way don’t go belly up.

    So we have to suffer ‘austerity’ or if Mr King will oblige, more QE and the devaluation of our currency, which is of courses our wages.

    Either way we’re expected to pay. And whilst ‘paying’ we’re expected to watch as the very people who caused the collapse in the first place grow ever richer, whilst we the ‘mugs, grow ever poorer.

    Anyway seeing as we’re getting nearer to our ‘austerity measures’ let's remind ourselves of the moral hazard:

    •The banks have taken Government money to survive.
    •The Government increases tax and cuts public sector jobs to pay for this.
    •The extra tax and/or loss of your job means you can no longer keep up with your mortgage payments.
    •The bank in receipt of the government money then repossesses your house.

    How about that for a moral hazard.

  • Comment number 39.

    As has been mentioned by lots of folk on previous blogs, we all accept that we have to make some cuts, however just cutting will not leave Britain emerging phoenix like after the flames.

    For any plan to be considered serious, we need to see how we are going to boost the UK income, as well as cut the UK costs. Without a plan to increase UK income, just cutting simply cannot produce the results we all want: how can it, these cuts after all just leave us where we were in 2005, still owing the world some £800bn.

    So we've analysed the cuts package, when are we going to analyse the income generating package?

    It's no wonder the British management class has such a poor name!

  • Comment number 40.

    The IMF is a pro-US, pro-USD, evangelist of dollar based debt and a lynchpin of the remnant Bretton-Woods fabric.

    It is a dinosaur in its last days.

    These reports are designed to help prop up Sterling and the religion of servitude to markets by slashing public spending in the name of market driven government funding.

    These were the same guys that along with OECD said in 2007 that everything was hunkydory. They probably still sell Enron shares to their close relatives too.

  • Comment number 41.

    There's always risk involved with whatever deficit reduction plan followed. GO's plan if successful will get us out of recession earlier, something we could never attain if a more cautious approach (AD) was taken and we'd never know if it could have been done faster if we didn't try (it sounds glib when so much could go wrong, but the IMF state that). If it all fails (and I hope it won't) at least GO tried to get us back on our feet quicker. In short, at least we can say we tried.

    I guess they're hedging their bets on any forecast but it does sound such an easy statement to make and and I'd like to know how strong their credentials are for getting predictions right, how much analysis their UK visits result in and how what reputation their senior analysts have and how independent they are.

    The growth figures seem a very generous, almost as if GB/AD had written them.

  • Comment number 42.

    The IMF's report is equivalent to Simon Cowell saying to several X Factor hopefuls, "You are potentially world class."

    We have known the stances of the Tories and Labour for several months. The public chose who they wanted to have the Christmas Number 1, but after that even Simon Cowell doesn't always pick long term winners. The report says very much what you would have expected them to say, but they have just enough reservation to save their blushes.

    Giving the UK a poor bill of health would not have helped global recovery, so you say, "There's a pretty good chance that the plan will work, but ........"

  • Comment number 43.

    Steph. perhaps you could do a piece on the Irish economy as this is a little scary at the moment and I'd like to know how insulated we are from 'contagion' (if that's the right word) and what could help us in this.

  • Comment number 44.

    #32 Steve

    Sorry to hear about the business. Anything we can do to help? You've got an international audience here.

  • Comment number 45.

    There are people here who seem to see recession as the worst thing that can ever happen to a country. It isn't.

    The reason Ireland chose the route they did is that they had to rebalance their economy EVEN IF they were going into an extended period of recession since the alternative was total meltdown. Finding their ability to borrow destroyed would lead to far greater problems than mere recession. Their government understood that and swallowed the pill.

    he UK is not in the position where rebalancing will inevitably lead to recession but if it does then it will be a necessary evil and we will be well placed to make a strong recovery. And capital markets will know that this time around instead of the concern they expressed when we emerged from the last recession that it was actually a pseudo recovery based on weak foundations.

  • Comment number 46.

    Save us from the IMF and all those think tanks such as the Taxpayer's Alliance. They're all on the same side, and all in it for themselves. If I had my way I'd put them in a great big sack. Osborne, the epitomy of a rich, arrogant, priviledged Tory I'd put right at the bottom with Ashcroft and his ilk, as they see things in a particular way - only money matters and they care for little else. To this I'd add the majority of the bankers, stockbrokers and hedge fund financiers who have brought our great country to its knees and top it off with the Coalition. I'd add the economists of doom and gloom, the Murdoch's and the 24-hour media along Mr and Ms Nasty. I'd tie it tight and pin a huge label on it - Spivs and Scoundrels - how they deserve oneanother. I reckon the world would be a better place if the bag stayed closed.

  • Comment number 47.

    It's about time we looked at the make up of the IMF. Who are these people. Bet their background is in banking. Do you trust them? I don't. They have the morality of bankers and we know what that is. They cause more problems than they solve. They're all in it together.

  • Comment number 48.

    What was the IMF's report for the Irish economy? Did they get that right?

  • Comment number 49.

    Bit surprised at the odd bit of carping about Stephanie's report. What else can she do but report the facts as she sees it?

    It is the IMF that has given the Government's management of the economy a nod - not Stephanie.

    We're still waiting for Labour's detailed alternative plans.

  • Comment number 50.

    Steve 32

    I'm pro business, including your own, which is why I support the coalition.

  • Comment number 51.

    #10 jobsagoodfornothin

    Your remarks are only political and a personal attack on Steve, whereas this is a blog about the economy.

    You imply that the bankers bare no responsibility for the current financial mess. I would be interested to see how many impartial observers agree with that one.

    You also fail to acknowledge the response to the crisis from the UK government, which was generally regarded and publicly acknowledged by leading politicians and commentators from other countries, if not the Conservative Party supporting UK media, as having been well-handled.

    If you want to pick a political fight, pick on somebody your own size, elsewhere, please.

  • Comment number 52.

    46. At 6:37pm on 27 Sep 2010, diane

    Well said Diane! and well done for choosing the pill of truth and freedom over the one for continued slavery and dullness.

    You are now officially a Red Tribal Lefty (whatever that means)

  • Comment number 53.


    A blog about the economy. Yes, I realise that now having read Diane's #46.

  • Comment number 54.

    @ steve (#32)

    The taxpayer has no business in subsidising bad decisions by companies. That you appear to be following Connaught into failure by chasing Labours monopoly money expenditure on "social housing" is not the taxpayer's fault. Perhaps you should castigate the previous maladministration for making implausible claims that you appear to have relied on. I'm sure that Labour could break out another bundle of monopoly money to hand to you.

  • Comment number 55.

    Thumbs up is not the way I would describe the IMF's imposition on Osborne's behalf. Fingers in the pie would be a more appropriate description.

  • Comment number 56.

    Again we have the simple problem. Ed and his old labour cronies are unable to see that spending more when you are in debt is a bad idea.

    Why don't we all try and spend our way out of austerity like Ed would have us do. Answer : nobody would lend you the money!

  • Comment number 57.

    Re Steve #32 etc.

    It's odd isn't that the (only) solution to UK PLCs problems is to get more people like Steve trying to be entrepenurial. Yet if he moans, everybody wants to kick him and blame him for poor decisions.

    Steve may or may not be right at his moan at GO. Probably it represents his current frustration that he can see very hard times ahead, and will have to sack good employees to save work for a few more. Very few of you will ever have to do this to people who you know well, and who trust you.

    There are relatively few of us who are brave enough to put our money where our mouths are and try and make out own living out of nothing.

    Perhaps those who aren't brave or competant enough to try it, and instead rely on a nice regular salary that magically appears each month, ought to show a bit more respect?

    Just a thought.

  • Comment number 58.

    The Tories led us all up the garden path at the last election only to slap us all in the faces with the aid of the Liberal Democrates. The Tories it seems can get away with mistruths. But they are a priviledged bunch and care little for the rest of us. The IMF are telling a few porkies as well. We'll see how things turn out. If we get 2% growth in spite of massive cuts, taking billions out of the economy, the VAT tax hike and the Tax Office mistakes reducing income in millions of peoples' pay packets. Along with the effect of all this on people's purhasing habits, unemployment, falling house prices etc, I'd be very surprised. But there again, this is a report produced by professional financiers/bankers - but then again, that another joke on us.

  • Comment number 59.

    HAS THE BBC JUST TURNED INTO AN ADVERTISING AGENCY FOR THE UK GOVERNMENT AND THE IMF TODAY? Because balance was clearly lacking in the report to do with the IMF backing the Coalition plans to tackle the deficit, yes, to get the economy sorted out the Tories are cutting needed jobs like nurses and doctors, and the BBC just says to any criticism of the government, that the IMF has a ringing endorsement. Why doesn’t the BBC just report the facts, the fact it didn’t go on to point out that the IMF says anything can happen with a severe reduction plan for the deficit. The 1.6 million jobs which will go in both the public and private sectors. How is the IMF endorsing this? So many job losses there will be and yet the unemployment is going down. I would work for fee if only I could get work and be the IMF , and I would do a much better job for the people of Britain.

  • Comment number 60.

    I'm NO red lefty, I just think the Millibands are great and the Coalition are not great. Still, I think a red lefty is more interesting than a Tory or a banker anyday. My heart hasn't been replaced by money. I believe the IMF are an extension of what got us into the mess in the first place and they're not to be trusted and pretty pleased to find a formum where I can express that opinion. The wonderful BBC - I love it.

  • Comment number 61.

    @ diane (comment 58)

    Who do you think should produce a report on the deficit reduction plan if not the IMF? Isn't it reasonable that professional financiers are looking at the economy?

  • Comment number 62.

    58. At 8:17pm on 27 Sep 2010, diane wrote:
    "The Tories led us all up the garden path at the last election only to slap us all in the faces with the aid of the Liberal Democrates. The Tories it seems can get away with mistruths."

    What garden path was that Diane? What mistruths was that Diane? From my reading they said all along we needed to cut and needed to cut deeper than Labour, who partly caused the crisis wanted.

    "But they are a privileged bunch and care little for the rest of us."

    Rhubarb Diane. They want the UK to get back on it's feet again. Privilege has nothing to do with it. Solvency has everything to do with it.

    "The IMF are telling a few porkies as well."

    We have a problem Diane, it's called Government debt. How would you deal with it? Pretend it doesn't exist? The Clown did his best to stop economic armageddon but in spite of entreaties from Chancellor Darling, would not have addressed our problems. If we don't reduce our fiscal deficit quickly, our debt repayments will skyrocket and then you'll see the effect on our Public Services of not biting the bullet now!

    "We'll see how things turn out. If we get 2% growth in spite of massive cuts, taking billions out of the economy, the VAT tax hike and the Tax Office mistakes reducing income in millions of peoples' pay packets. Along with the effect of all this on people's purhasing habits, unemployment, falling house prices etc, I'd be very surprised."

    Yes it will be savage. Maybe you don't remeber the last time the IMF came knocking in the mid 70's and had to bail us out. Do you really want that? Think Greece today.

    "But there again, this is a report produced by professional financiers/bankers - but then again, that another joke on us."

    Yes you are right, but unless we have another system or better controls we have to live with the joke on us.

  • Comment number 63.

    Even in his first few weeks of office ... George Osborne's resolute approach and stated intentions for tackling the UK debts and deficits has already probably saved the UK from the catastophe of a run on the pound and interest rates soaring and Britain going begging to the IMF as it did in 1976 ... thanks to you know who.

    We all owe Geroge Osborne an enormous debt of gratitude ... for rescuing us from the abyss and I prefer this debt of gratitude to the debts and deficits as amassed by the previous government.


    BTW, Some don't 'get it' ... because they never will 'get it' ... even though they say that they do 'get it'

  • Comment number 64.

    @ Crookwood (#57)

    Part of being entrepreneurial is evaluating risks. Back in 2003, when it became obvious that Brown was deficit spending during a boom, our company (I am one of the founders) increased our cash reserves to cover the risk of a crash. In 2006, since Brown's deficit was clearly structural, we increased our reserves further. We haven't laid anyone off. We are now recruiting, to take advantage of opportunities left by failed entrepreneurs.

    The point is that Steve is blaming the wrong man. Brown was responsible for the deficit. Steve appears to demonstrate that if you make the wrong analysis, you come to the wrong conclusions.

  • Comment number 65.

    Where on earth does the IMF come into our current situation? Does it want to borrow money again?

  • Comment number 66.

    Irrespective of which political party you follow it would seem that if the UK is not seen to be tackling the deficit quickly enough there is a danger of our credit rating being downgraded. If this happened the interest payments on our debt would soar and a 'double dip' would be the least of our problems. Any opinions?

  • Comment number 67.

    "We all owe Geroge Osborne an enormous debt of gratitude ... for rescuing us from the abyss and I prefer this debt of gratitude to the debts and deficits as amassed by the previous government."

    I suggest you wait 12 - 18 months before making a rash judgement.

    'Slash and burn' is not a skillful calling. You only need to look across the Irish Sea to see the effect it is having there.

    No one disputes the need for reducing the deficit as quickly as is practical but the argument for a more gradual deficit reduction is a compelling one especiaaly given the long maturity of UK debt.

    We have a Tory government aided by the Court Fool - little Nicky C - using the deficit as a smokescreen for ideological state reduction.

  • Comment number 68.

    To 63. At 8:46pm on 27 Sep 2010, nautonier

    Deficit reduction?

    Come on nautonier, you of all, should know that deficit reduction can be done in an instant.

    Breaking free from financial servitude however, may take a while longer, and the sadness is, for the younger generation, it can’t come soon enough.

  • Comment number 69.

    Can I ask where is the IMF report. For what its worth it is here:

    The nature of the report is they say: "It describes the preliminary findings of IMF staff at the conclusion of certain missions (official staff visits, in most cases to member countries). Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, and as part of other staff reviews of economic developments."

    The final sentence:

    "We are grateful for the warm welcome by those we have met during our discussions."

    As I pointed out at 11# they would have said much the same about AD's plans perhaps suggesting different risks.

    In fact however economically sound the cuts are... whether faster or slower, deeper or thinly spread, the government wants a 'smaller state' It is a no-nothing government in policy terms leaving the secretaries of state to ride their hobby horses, (free schools, dust carts to call once a week, GP's, some of the most well paid independent contractors in the state sector, to run the NHS)) There is no sense an overarching policy direction. There is no danger of the Government unravelling since it was never, and never intended to be knitted into a joined up administration.

    Cuts are the swords of the ConDems revolution.

    Reductions in expenditure are necessary as are rising taxes and CHARGES, but to what purpose other than the balance sheet? I think we ought to be told.

  • Comment number 70.

    # Steve

    What services and products does your business offer?

    #The rest

    Why are you not contributing to the economy and asking what you can do for Steve?

    #The IMF
    The IMF exists to rape developing nations for physical assets and enslave Western nations to dollar debt. It is there like a vulture whenever there is a banking crisis, to help fund debts that will eventually default or need restructuring in favour of the US centric hub.

  • Comment number 71.

    Two weeks ago (13.9.10) the IMF Director General warned of the human cost of public spending cuts. See

    The IMF 'warned western governments that they risked holding back the recovery and creating a massive pool of disaffected labour if they pursued draconian cuts in spending'

    Stephanie, could you please comment on how today's assessment squares up with this warning?

  • Comment number 72.

    Re: 64. Cynosarges

    This being an anonomous blog, it's easy to cast views, without knowing all the facts, or not having to worry about the repucussions, myself included.

    You are to be congratulated for seeing the pattern evolving and adjusting to it. You are also to be congratulated for putting your own money where your mouth is and trying to create something.
    However, many good people didn't see the result coming, some foolishly, and some because they made the wrong judgement. To correct for this we need to show compassion and give advice, rather than lambast. To the same extent Steve will have to review what the real causes of his problems are, learn and adjust however he can to stay afloat.

    I feel at a time when many peoples world's are about to come crashing down, we need to be looking to create as many things as possible to counter the destruction. We're not animals and we don't leave our injured to die, we try and nuture them to recover.

    Again, well done on seeing which way the wind was blowing. But it's wrong to feel smug or complacent ( as I'm sure you well know), because the future is still uncertain.

  • Comment number 73.

    The IMF agree with slashing public spending? How is this news? It's been their standard mantra for 3 decades, if people want to read a critique of the IMF's record read Joseph Stiglitz' Globalisation and it's Discontents.

    I've been asking this question for months now, we "had" to slash public spending to avoid calling in the IMF apparently, but how would it have been any worse to call in the IMF? The IMF prescription is usually privatising you industries and banking, which Thatcher did years ago and slashing public spending which Osborne is doing now. If the economy goes into recession the IMF won't bail us out because our economy won't be able to cut any more to pay it back.

    I'm sick of reading there's no alternative, there are alternatives all over the place, there's no political will for an alternative, that's a different thing.

    And now Odd Milliband reassures voters that he's not going to lurch to the left and will protect the middle classes, which is a big relief because I feared the middle classes were going to be left with just the other two main parties in British Politics to protect their interests.

  • Comment number 74.

    We are spending £120 Billion on the NHS this year, employing 1.5 million.

    We are borrowing an extra £150 billion this year.

    So in layman's terms we would need to completely close the entire NHS to be balancing our books.

    Yet there is still debate about reducing the deficit speedily!

    Helped on by Darling the Dissembler on the radio today saying "our debt is now coming down".... when he knows that it is the RATE OF INCREASE that is starting to gradually reduce. It will be at least £1.3 Trillion before the end of this parliament, and he knows it, but deliberately uses words so the ignorant listener is kept in the dark.

  • Comment number 75.

    In my opinion, the IMF seem to want to have it both ways. At least the coalition have been consistent in their approach but it is bit late in the day to turn their back on their committments now? If you examine it more closely, Ireland did everything Messrs Cameron, Clegg and Osborne say we need to do. They’ve had a year of cuts, austerity and belt tightening. The result? Their debt was downgraded again in July 2010.

    Cutting now hurts those in need and harms future growth.

  • Comment number 76.

    Much of this current blog continues to overlook the looming iceberg whilst discussing deck chair rearranging.

    World demand is currently flat to down and yet key commodity prices, in particular oil and natural gas, are at consistent highs. Why is this?

    Answer: we can't get enough oil and gas out of the ground to meet the needs of the global economy we have built over the past century based upon cheap oil.

    Take a look on the internet at various articles on peak oil and look at how totally dependent our unprecedented huge world population and way of life is on oil and it's unrealistically low historical price.

    I think you will see that due to our complete lack of a viable alternative in the time frame we have left to act that we are in much deeper trouble than anyone on this blog or in the government seems to realise.

  • Comment number 77.

    @ Crookwood (#72)

    You wrote

    "I feel at a time when many peoples world's are about to come crashing down, we need to be looking to create as many things as possible to counter the destruction. We're not animals and we don't leave our injured to die, we try and nuture them to recover."

    Although this sounds good in abstract, there are limitations in real life. As Liam Byrne wrote "Sorry, there's no money left." Brown abandoned Keynesian economics back in 2003, and there's no money left to pump into the system. All we can do is carry out triage.

    (A military medical technique, essential when any disasters occur.) Any injured are classed into 3 groups - those who you expect to die, regardless of treatment; those who will survive, even if untreated; and those who can be saved with treatment. You concentrate on the last group, where effort has some value.

    You provide any assistance where it has most effect. You don't indiscrimately borrow more, or tax more, as Labour's two Eds urge. This would poison the patient, not cure him.

    We are doing our (small) part, by recruiting. But we are only recruiting where (1) we believe they will add value to the company, and (2) we are satisfied that are reserves are sufficient, even if the work does not materialise, and we have to carry the additional costs. We still hold a candle to the lady Prudence (You know, the girl Gordon abandoned for an affair with her wastrel sister Debt)

  • Comment number 78.

    2. At 3:46pm on 27 Sep 2010, Steve wrote:

    Economic UK armageddon is just around the corner and Osborne will be to blame. No one else.
    First half of sentence - hmmmnnn. There were several posters on the Beeb site predicting the end of the Euro by the end of August ...

    Second half of sentence - pray, do tell exactly what GO has done up to now to cause UK economic armageddon?

  • Comment number 79.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 80.

    Why should we pay any heed to what the IMF says? They are staffed by economists. These same economists were quite happy that ever larger numbers of people in our society were racking up ever larger personal debts. These same economists were quite happy that house prices in the UK continued to spiral upward far faster than wages and that the proportion of income allocated to mortgage repayments spiralled ever upward. These same economists, when it was becoming ever clearer to anyone with half an ounce of intelligence that too much of our national wealth was lying in the bank accounts of a tiny minority of the population while the huge majority of the population were buying things they couldn't afford, applauded the vast bonuses of the wealthiest and the screwing down of wages for the poorest.

    Frankly, I wouldn't trust these people to tie their own shoelaces

  • Comment number 81.

    Sage is right on the money, peak oil is stalking us all

  • Comment number 82.

    #63 nautonier

    The old broken record technique, eh? The more you tell a lie, no matter how outrageous, the more believable it becomes.

    Inflation was higher under the Conservative governments of the early 70's and early 80's than under Labour in the late 70's. It is a myth that Labour caused inflation in the 1970s, repeatedly spread very successfully by Tory politicians since Margaret Thatcher.

    Inflation ballooned under the late Heath period up to 16%, further spiralling out of control to 24% before Wilson tackled it and it spiralled again in the early Margaret Thatcher era to 18% in 1980 and was reduced by the Labour government in every year apart from first and last between 1974-9. Under Mrs Thatcher it had escalated to 9.5% again by 1990.

    It was in strongly in Osborne's political short-term interests to talk up the prospects of a crisis of confidence in the economy on the markets. No matter how strong the relative UK position was on sovereign debt, there was never a genuine prospect of such a crisis in confidence, unless he talked it up enough.

    Remove the blue-rinse covered spectacles and deal with the facts.

  • Comment number 83.

    I'm afraid the IMF report IS political and no amount of criticism of Labour for espousing Keynsianism will disguise the fact that it makes a highly ideological free-market argument for the cuts. It has always tried to influence countries' policies in that manner, in reality offering politics rather than economic sense, to the detriment of nations such as Argentina.

    I also believe the following comment by Stephanie reveals her bias:

    It is safe to say that Ed Balls will not change his mind on the basis of reading this report. Neither - I suspect - will anyone else appearing on the stage in Manchester this week. But in the public relations battle over the deficit, Mr Osborne's team has won an important, and surprisingly unqualified, endorsement.

    I rather think she is spinning the IMF report as being important and places too much faith in it.

    Unfortunately the result of the excessive austerity will be that the poor will suffer terribly and the wealthy will make a killing. Perhaps that's why they feel they can take huge risks with people's money and lives with impunity. The blame for the recession has, incredibly, been shifted in the media from the unbridled rapacity of the private sector to the public sector. Of course the government had every right in the boom years to spend money on infrastructure etc, just as a profit-seeking company will invest more when it's successful. The government did not overspend on the poor; it overspent on the RICH by taking on debts that far outweigh those of the public services.

  • Comment number 84.


    "Export led recovery? Pull the other one?"

    What sort of recovery would you prefer? We tried to keep the economy going on consumer spending and we all know how that ended up. There are plenty of fine world class British companies out there doing their bit to help out. As long as we don't stifle them with red tape or encourage a brain drain with punitive taxes. A slice off an imported pound is worth a lot more to the government than a slice off some recycled money on it's way out of the country.

    The company I work for is an net exporter and currently hiring, doing our bit to aid the recovery.

  • Comment number 85.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 86.

    The IMF (In My Footsteps) is there to ensure that those invited to its "club" dont let on its a concentration camp to allow them to leak their nasty nasal juices over those not yet in the camp.

    Of course it is going to praise cuts - the self interest of protectionist capitalism. They believe that the only way for the system to survive is by the default prone nations of the camp to cut cut cut in order to get to a base that allows the reinflation of fait money - too late though

    They have not factored in ALL THOSE MILLIONS behind the camps fence that are still half fed -

    People on their feet are more likely to breath freedom than thoise on their knees inhaling dust.

    It starts with protest, ATC strikes, work to rule - will end with unified dissent against the IMF and the whole pyramid of tryanny

  • Comment number 87.

    When the IMF say, "The plan greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery." do they count the confidence of the millions of people affected by the Bankers' crises or the millions of shares instrumental in causing the crisis? While the people can be filled or drained of confidence, the shares are neutral when it comes to confidence.

    The quotes smack of the IMF refusing to rock the boat. Why would the IMF destabilise an economy already destabilised by the backers of the IMF and its policies: the whole report would seem to be a self-aggrandising exercise in seeking political stability. A stability that would be necessary to boost "banking confidence" - the mythical creature that "drives" the economy. As opposed to the economic activities of unaggregated, unreportedm individuals.

    The reporting and analysis of banking and investment has been struggling for some years now. Original research and innovation seems to have vanished. The IMF is simply one in a long line of "expert" organisations that recycle old ideas, old reporting and old solutions to old problems that did not work before the crisis.

    Had the analysis of the IMF been accurate, timely and respected then the Banking Crisis would have been flagged before it happened and the Financial Industries would have reacted to avoid catastrophe. The IMF might seem to carry weight when the Condems announce ideological cuts far beyond deficit reduction. The IMF got it wrong about the Banking Crisis (the evidence being that it happened regardless of IMF commentary) as did so many other policy forming financial researchers.

    The IMF is not about economic recovery (just look at Greece - very IMF Friendly and an incomplete mess - or Ireland, politicians so craven they cannot bear to criticize bankers). The IMF is about self justification for the very organisations that created the situation.

    Austerity for individuals or austerity for shares. That is the real choice: pander to bits of paper so that they can be circulated without fear of their imagined values being compromised or treat people with dignity, respect and genuine concern for their contribution to the economy. As with all the other guff arising from Financial Organisations in the last year or so, this report is all about protecting financial institutions and nothing about addressing the devesation caused by their failure to actually think, analyse and criticise.

  • Comment number 88.

    82. At 00:45am on 28 Sep 2010, fleche_dor wrote:

    #63 nautonier

    Be grateful than in George Osborne, the UK and has someone who can be trusted to tackle Gordo's debt/deficit mountain and balance of payment shambles... and take action ...

  • Comment number 89.

    OK so let me get this right. What the IMF are saying is you have a patient to whom you are giving a blood transfusion and cutting that transfusion half way through and hoping the patient lives?

    Is that a risk worth taking?

    I think not!!

  • Comment number 90.

    87. At 08:17am on 28 Sep 2010, hubert huzzah wrote:
    I know that the IMF is as popular as a bankers conference held in Wakefield. (Before anyone says anything, there is nothing wrong with Wakefield) However there is little to support this ill feeling. In fact having worked with them in a number of countries I can only say that they are professional and very proficient at what they do. But their unpopularity is not down to how they do their job it is why they are doing their job. Tax men are vilified in the same way but where would be if they did not do their job.

    The Issue the IMF have is that their people are only brought in when things have gone too far. They also deal with facts and not with political truths. You can see this in Greece and Ireland where the size of the problem and its nature is finally exposed. Not a popular job but a worthwhile one at that. For you can not prescribe the cure if you do not know the illness let alone the cause.

    89. At 08:43am on 28 Sep 2010, ToriesBrokeBritain wrote:
    So the question you should have asked is did the patient need a blood transfusion in the first place. It mat well be that the transfusion was indeed not curing the patient but exasperating the situation.

    So, please do not shoot the physician as all too often the physician is called too late to save the patient without taking drastic action and the patient never likes the diagnosis especially one that states that the illness was self induced.

  • Comment number 91.

    It interesting to note that the IMF repeat the new orthodoxy that the prid pro quo of reducing public sector expenditure is that interest rates remain low - ie at or around current emergency level.

    If the IMF was so convinced that the medicine had an economic benefit then it would also be advocating higher interest rates.

  • Comment number 92.

    84. ALEX. I hope I'm wrong about the chances of a sustainable export led recovery but the data says otherwise:

    1) Oil the lifeblood of the world economy is either just past, at, or almost at peak supply levels. This means we can not grow the daily or annual output of oil anymore. It also means that we are forced to tap and extract ever more inaccessible oil (shale, tar sands, Deep Water Horizon depth drilling etc). Together with rising demand from a rising world population this leads to only one conclusion, shortages and very high prices for oil and other energy sources. Long distance trading (exports) are unlikely to be able to flourish in this environment for obvious reasons as we entrench back to more sustainable and affordable localised trading.

    2) Even if there is no energy crisis Britain has very little industry that is world class on a large enough scale. Our expoerers are predominantly medium or even small sized enterprises. We don't make quality cars like the Germans and high end engineering and precision equipment like them the US and Japan. Certainly not in any quantity that can impact at the national balance of payments level.
    We are hopelessly overpriced compared to Asia at the low tech high volume end (although this may alter with higher oil prices).

    We are left with services and our greatest of these is finance. However, as we can see that is inexorably moving east too following the centre of gravity of the world economy.

    No I feel that uncomfortable as it is we have to be realistic. High priced and scarce energy and all the shortages and changes of lifestyle that it will bring has to be faced up to, planned , and managed. We need to learn the lessons of the past but stop recriminations and the blame game.

    Our population has to be reduced over the next century and I would prefer we did it in a managed, humane, and less painful way, rather than letting nature and capitalism ravage it and plunge us back into a kind of new dark age equiped with modern weapons.

  • Comment number 93.

    The 'strategy' becomes clearer.

    Savers have to pay the price of little or no return for not spending.
    Householders and businesses unable to borrow because of high retail interest rates.
    Banks can use the margin to rebuild their balance sheets.

    Win Win unless you are saving for your retirement or have a genuine need for credit. Combine that with the proposed spending cuts. The effect on the people of this country is clear and yet we still have the apologists for these people bleating on.

  • Comment number 94.

    It must have been a sharp turn then, as one of the more common complaints I've noticed in the comments sections on this website in recent weeks has been the BBC apparently spelling out ensuing doom over spending cuts with little regard to arguments on the other side in order to please Labour (an argument against the idea the BBC automatically becomes a shill for whoever is in power).

    For crying out loud, the BBC cannot be putting forth both sustained pro-Tory and sustained pro-Labour bias. They are hardly perfect, and I feel like a stooge just for sticking up for them, but I doubt the corporation advances such different biases in such a short timeframe. The IMF did endorse the Coalition agenda, and if they had condemned it (get it? I'll get my coat), I fail to see how that would not have been reported, so it's hardly an advert, and since any political party would claim to have won the argument had the IMF supported them (and dismissed it if not) it is not exactly an advert for them either, but it is news regardless, and needs to be told.

    Personally I'm not any more confident at the IMF's report, as economic forecasts never seem to be right anyway (not being involved in that sector I can only hope the very wrong forecasts are just the ones that get more coverage later and so stick in the mind rather than the usual), but I hope they are right. There are tough times ahead, the government seems committed and there is nothing immediately on the horizon that could change their course even if I/we should wish it, so here's hoping the IMF proves right, eh?
    2. Economic UK armageddon is just around the corner and Osborne will be to blame. No one else.
    Now, I'm not a Tory (and public spending cuts might well mean me losing my job), but that seems a tad unfair doesn't it? Even if we take the view that his plans are dangerous, and that, for the sake of argument, Labour's influence on the dire economic situation was negligible or non-existent and a result entirely of external factors, the accepted view of all parties seems to be that a dire economic situation existed. In that case, even if he makes a bad situation exponentially worse, Osborne will hardly have been the only one to blame, and taking such an extreme view will lead to to a dismissal of other arguments against his policies as a matter of course. Not that it will be much of a comfort if we are facing armageddon.

  • Comment number 95.

    #94. Kieran:

    Just a couple of small points....

    "the BBC cannot be putting forth both sustained pro-Tory and sustained pro-Labour bias"

    Unless they are both the same of course? Your position on the BBC's position may be explained as the BBC is putting forward the establishment's point of view and both parties are parts of that establishment. I have long argued that we have two conservative parties one called Tory and the other called Labour!

    "Osborne will be to blame

    If you take on the job of running thins if thing do not go well it is your fault. However only the conservative policies of the previous government from Thatcher, Major, Blair and Brown can really be held us as a cause of our economic collapse. Osborne has taken on the job of fixing the problems caused by his predecessors.

    [First thing I would do if I was in Osborn's place is fire the existing regulators and revise the system of regulation - neither has he yet done and until he does, the mantle of the errors of the past is rightly transferred to him! So he is to blame. PS fire Mervyn King and Nick Macpherson, the MPC etc., they gave us the failed and fraudulent monetary and economic regulation system and they have to go.]

    I firmly still cling to the hope that the economic system can be saved from itself, but I concede that with fools such as Charlie Bean (see today's news) the outlook is not good, in fact it has seldom seemed darker.

  • Comment number 96.

    The markets like the plan and thats all that matters. The IMF gold star is simply an opinion that at present is not crucial.

    Had labour stayed in power much longer then no doubt we would have been needing the IMF and their money. Best not to borrow so much you can no longer pay it back. Once you cannot borrow then you cannot run any deficit and that is pain of a very different order. That is why the UK is effectively on a debt management plan.

  • Comment number 97.

    96. At 09:53am on 28 Sep 2010, johnboy911 wrote:
    The markets like the plan and thats all that matters


  • Comment number 98.

    94. "the BBC cannot be putting forth both sustained pro-Tory and sustained pro-Labour bias"

    Unless they are both the same of course? Your position on the BBC's position may be explained as the BBC is putting forward the establishment's point of view and both parties are parts of that establishment. I have long argued that we have two conservative parties one called Tory and the other called Labour!
    A possible solution to the apparent dilemma that so angers both die hard Tories and die hard Labourites, true. I'm not sure how correct it is, but the whole point of a Loyal Opposition as I understand it, is that it opposes the government of the day while accepting the basis of the government to rule, and all parties these days try to fight for 'the middle ground' (or 'shape it' if you are Ed Miliband), so there's bound to be other areas they all overlap in accepting on.
    "Osborne will be to blame

    If you take on the job of running thins if thing do not go well it is your fault.
    Agreed, though I stress all I meant was that even if his policies are wrong, there was already a mess, either solely because of unforeseen global economic trends, or that in concert with the things you state after (prev gov. policy). Doesn't mean he cannot make it worse of course, but I do not think Osbourne alone, or even this government alone, can be the only ones to blame if they fail to fix things. They'll have to accept principal responsibility for failing to address it in those circumstances (esp as since they do blame Labour for exacerbating things they cannot blame any possible future dip on global reasons alone), but were not the cause, as was the suggestion of the comment I, er, commented on.

  • Comment number 99.

    the imf are bankers,all millionaires so why should they think any different.perhaps this is one quango that should be done away with.the only failure of the labour government was not to crack down hard on the banks,after all they instigated the mess.

  • Comment number 100.

    99. At 10:17am on 28 Sep 2010, philip spence wrote:
    Please get your facts correct, not all the IMF are bankers and they are definitely not all millionaires. In fact not all Bankers are millionaires. This is just a myth put forward to perpetuate the hate culture and focus it on someone or something else rather than let the blame sit where it truly should and that is on our shoulders. For was it not us who voted in the last goverment.Was it not us who jumped on the housing boom to make a quick buck and did we not avail ourselves of easy credit. Not to mention the fact that we all bought into the have it all now ethos. We are selfish idiots who were duped by the ponzi scheme of Nu Labour.


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