The IMF & UK Treasury

In 2011 The International Monetary Fund spent time in the UK investigating events surrounding the London financial market banking crash and it’s adverse impact on the economy. A report was produced; http://www.imf.org/external/np/ms/2011/060611.htm

The report contained a number of tough remedial measures, (including cuts in welfare spending, reducing pensions, extension of working age before pension and other restrictions). It was the firm belief of the IMF that the changes, though unpalatable were necessary to assist recovery of the UK economy from further disaster should treasury officials and the Bank of England, (perish the thought) get their forecasts and policies wrong.

John Lipsky, “First Deputy Managing Director of the IMF”, offered, “The level of public spending as a percentage of GDP in our forecast has reduced by about half a per cent of GDP as compared to the previous fiscal year. However, it remains very far above the pre-crisis levels of spending and represents a long-term high in spending”.

Seemingly determined not to undermine George Osborne he refused to define a, “prolonged period of weak growth” that could trigger a hypothetical, “PLAN B”. “I wouldn’t want to get into any false precision about definitions” is how he put it. Yet, “PLAN B” was evident. Adoption of deeper long-run entitlement reform coupled with quantitative easing by the Bank of England, (printing money). In a, “post press conference meeting” treasury officials dismissed, “PLAN B” insisting it was an IMF recommendation and not government policy. Yet their was within the room a distinct impression that Tory MPs would soon be renewing calls for a speedy implementation of, “PLAN B”.

So, George Osborne refused to provide details of his, “PLAN B” to the UK public and Westminster politicians. Yet, “Bitter Together” keep rabbiting on about the, “Yes” campaign’s refusal to provide details of their currency, “plan B”. (If the cap fits wear it). You show me your’s and I’ll show you mine !!

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