Osborne rebuked by IMF over size and speed of cuts

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?