Osborne rebuked by IMF over size and speed of cuts

January 24, 2013 9:24 am

There was a quite remarkable attack of George Osborne’s failed austerity measures this morning from the IMF’s Chief Economist. Speaking to the Today Programme, Olivier Blanchard urged Osborne to pursue “slower fiscal consolidation” – AKA “going less far and less fast on cuts”, effectively endorsing Labour’s position on getting the economy back on track.

Blanchard went on to say:

“Our early advice is still very much there. We said that if things look bad at the beginning of 2013 – which they do – then there should be a reassessment of fiscal policy. We still believe that; you have a budget coming, I think, in March, and this would be a good time to take stock and see whether some adjustments should not be made.”

And on austerity:

“We have never been passionate about austerity. I think from the beginning we always emphasised the approach that fiscal consolidation should be steady, slow steady based on a medium-term plan so I think we have always been fairly consistent on this.”

This will be particularly embarrassing for George Osborne, who boasted of his standing at the IMF only a few months ago in his conference speech, saying:

“This Wednesday I’m also going to a meeting of the IMF. Don’t worry. Because of the resolve of the British people, I go representing a country that is seen as part of the solution, not part of the problem. That is only because of the credibility our plans have earned.”

What credibility would that be George?

  • http://www.facebook.com/jim.crowder2 Jim Crowder

    A most interesting interview. The interviewer pushed the Labour line very hard and effectively asked Blanchard to agree with him rather than ask Blanchard to explain things. I was surprised that it was allowed by either the BBC (as impartial) or by the IMF as misquoting.

    • DanMcCurry

      Jim, Blanchard is a grown up and he gave the quotes knowing what they mean.

  • DanMcCurry

    Although it’s a bit cheeky of the IMF to say “We have never been passionate about austerity.” He’s obviously not talking about the IMF of old that liked to force the developing world into humiliation, time and again and again.

Latest

  • Featured 8 questions Iain Duncan-Smith must now answer

    8 questions Iain Duncan-Smith must now answer

    In November 2011 Iain Duncan Smith promised – one million people would be on Universal Credit by April 2014. Three years on fewer than 18,000 people are receiving Universal Credit. Despite over £600million being spent on the new benefit the programme is beset by chaos, waste and delays. This afternoon Iain Duncan Smith was forced to appear before the House of Commons to answer questions about this failing programme. But once again he refused to answer the simplest of questions about his […]

    Read more →
  • Comment They left us wanting more – Gordon Brown is only the latest big beast to depart

    They left us wanting more – Gordon Brown is only the latest big beast to depart

    “Always leave them wanting more.” It’s not entirely clear who said it first, but this has become one of the more popular, if rarely achieved, political clichés. Of all the recent political leaders we might have expected to stand aside with a clamour for more ringing in his ears, Gordon Brown would not have featured prominently in discussions. Brown’s Labour leadership culminated in the party’s second worst General Election performance in the post-war era. Although he opted to remain in […]

    Read more →
  • Comment Regional banks: a crucial ingredient to help small business

    Regional banks: a crucial ingredient to help small business

    On 19 November, I was at a meeting at the German Embassy with the head of the German Savings Banks Group, Sparkassen, Georg Fahrenschon. Herr Fahrenschon told us that local savings banks were the biggest single driver of economic resilience through the global financial crisis and in the recovery since. This was because of their support for small businesses, which are the backbone of the German economy. In the US, the economic recovery has been far stronger and more sustained […]

    Read more →
  • Comment To win back people’s trust, we need to be honest about what the limits of politics are

    To win back people’s trust, we need to be honest about what the limits of politics are

    With just over 6 months to go until the next General Election, one would expect there be to a lively debate across the political spectrum mapping the key battlegrounds of the election campaign over the coming months and presenting some of the major policy ideas of each party. Instead there appears to be a general mood of helplessness among both the Conservatives and Labour. Numerous commentators have highlighted a fundamental disconnect between the political class and the electorate; an insidious […]

    Read more →
  • News Labour will set up a national refuge fund

    Labour will set up a national refuge fund

    Today it’s International Day to Eliminate Violence Against Women. Yvette Cooper has marked this by announcing that Labour will set up a national refuge fund and is committed to continuing support for rape crisis centres. Cooper, writing in the Guardian, says that Labour will use the £3million they would save by abolishing police and crime commissioners to do this. This pledge is significant given that under the Coalition, cuts have meant that between 2010 and July 2014  the number of […]

    Read more →