UK can't afford another fiscal rescue, warns IMF

[FarCenter]

In calculations that will spark further criticism over the state of the public finances, an IMF paper presented to world's leaders has laid bare how the UK's indebtedness has left it unable to provide the vital stimulus the economy could need over the next 18 months.

Every other G20 country apart from the UK and Argentina has been able to budget for temporary spending increases or tax cuts next year to help drag their economies out of recession, according to the paper, presented to a recent G20 meeting in Basel. Even Germany, whose finance minister Peer Steinbruck has accused the UK of "crass Keynesianism", plans to spend a full 2pc of its economic output on such measures next year.

Falling tax revenues are about to balloon our budget deficitThe news underlines the fact that with Standard & Poor's having warned recently about the parlous state of the UK accounts, Britain has very little leeway to afford new emergency measures. However, sceptics will warn that it also makes it doubly likely that in the pre-Budget report this autumn the Chancellor will announce extra measures to keep Britain in line with its G20 counterparts.

The UK entered the recession with the worst structural budget deficit in the Western world, leaving it with little room to borrow in order to lessen the impact on profits and unemployment. Although the IMF last week said it now expects the British economy to return to growth next year, its calculations over the implications of the deficit underline the fact that any recovery will be tepid.

<SNIP> http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5804507/UK-cant-afford-another-fiscal-rescue-warns-IMF.html

[provis99]

1. has the IMF ever been right, even once?

The IMF is the neo-cons of the economic world.

[LeftishBrit]

2. The IMF helped to mess up the UK once already

In 1976, with their loan conditions, which involved demands for cuts. Helped pave the way for Thatcher.

So I don't trust them. And I don't trust the Torygraph either. And I don't greatly trust 'Standard and Poor' (marvellous name for them).

And I don't trust the government.

And still less do I trust the probable next (Tory) government.

So I suppose you could just say I don't trust anyone much. And yes, the economy's in a mess, though I don't know that it's worse than in many other places. But moving from an industrial-dominated economy to a banking-dominated economy certainly didn't help.