IMF Warns UK Austerity Measures Aren't Working In Fresh Blow To George Osborne

[Póg mo 1,749]

Just kidding, of course austerity isn't working. The UK will hopefully be a cautionary tale for anyone else who believes Austerity is the only way to fix an ailing economy.

The International Monetary Fund has warned that George Osborne's austerity measures may need to be rethought.

A report on the UK economy, published on Thursday, said: “The planned pace of structural fiscal tightening will need to slow if the recovery fails to take off even after additional monetary stimulus and strong credit easing measures.”

This will come as a blow to David Cameron, who on Thursday told The Daily Telegraph that austerity could in fact last until 2020.

It is also bad news for George Osborne, who two years ago, in reference to whether there was any alternative to tightening the purse strings, said “there is no plan B”.

The IMF recently stated that the Coalition's austerity measures were the right course of action, but it doesn't appear to think so any more.

The report said: “Recovery has stalled. Post-crisis repair and rebalancing of the UK economy is likely to be more prolonged than initially envisaged.

“Confidence is weak and uncertainty is high. Looking ahead, the economy is expected to grow modestly, but with current policy settings the pace will be insufficient to absorb significant slack in the economy, raising the risk of a permanent loss of productive capacity.”

Ed Balls, Labour’s shadow chancellor, in response to the IMF’s report, said: “This is a very serious warning to the Chancellor that urgent action to boost jobs and growth is needed. How much longer must we wait, and how much more damage must be done, before George Osborne finally does the most important u-turn of all?

“The IMF is clear that the government’s economic plan - Plan A - has failed. They say that weak growth means the government will miss its debt target and that the Chancellor’s existing policies risk causing permanent damage to the British economy."

Meanwhile, Mehdi Hasan, Political Director of The Huffington Post UK, said: “This isn’t what an under-fire George Osborne will have wanted to be reading ahead of his summer break. After all, he has spent the past two years constantly, loudly, publicly invoking the IMF as a committed supporter of his plan A for Austerity.”http://www.huffingtonpost.co.uk/2012/07/19/imf-warns-coalition-to-slow-austerity-_n_1686030.html?utm_hp_ref=uk

Edited July 19, 2012 by InKorea

[mawilson 2,133]

Austerity takes time to work. You can't spend like a drunken sailor for decades, then have austerity for a couple of weeks or months and expect it to work right away.

[Póg mo 1,749]

Austerity takes time to work. You can't spend like a drunken sailor for decades, then have austerity for a couple of weeks or months and expect it to work right away.

I guess that settles that then.

[mawilson 2,133]

I guess that settles that then.

It'll be settled in a couple of years.

My prediction: the UK will be doing much better than today, the US will still be limping along, only with 3-4 trillion dollars deeper in debt.

[one...two...tree 2,762]

I guess that settles that then.

[mawilson 2,133]

Funny indeed - this coming from our resident genius who never posted an original thought that didn't come from some left-wing propaganda web site!

[Póg mo 1,749]

Funny indeed - this coming from our resident genius who never posted an original thought that didn't come from some left-wing propaganda web site!

Well at least when I post something, I usually try and provide reasons why I think the way I do, and not only rely on one liner glib responses based on unsupported and therefore worthless opinions.

[Bad_Daddy 2,209]

Well at least when I post something, I usually try and provide reasons why I think the way I do, and not only rely on one liner glib responses based on unsupported and therefore worthless opinions.

He was referring to the poster using the moniker Mister Fancypants on here, not you.

[Póg mo 1,749]

He was referring to the poster using the moniker Mister Fancypants on here, not you.

fair enough.I guess I should have taken my morning dose of ritalin before hitting reply.

[Neonred 3,667]

Just kidding, of course austerity isn't working. The UK will hopefully be a cautionary tale for anyone else who believes Austerity is the only way to fix an ailing economy.

Of course austerity doesn't work. Obama knows that. The answer is to spend a LOT of money even if you are broke. Borrow it and/or print a bunch more. That should fix the problem.

[I AM NOT THAT GUY 5,715]

The IMF lacks any credibility. I put them on the same one world wacko list as the Tides Foundation, World Bank, Southern Poverty Law Center, etc.