‘Lies, damned lies’, the IMF and government borrowing

We interrupt our series on how to get the UK back to work for a few words about the economy: Out of the frying pan, into the fire!

The IMF has downgraded its growth expectations for the UK economy this year by a whole one per cent, from 1.6 per cent to 0.6 per cent.

In other words, the downward spiral that’s been going on – ever since David Cameron and George Osborne decided to halt the promising recovery we were enjoying before they came to office in 2010 – continues unabated.

So austerity doesn’t work, right?

My problem with this is that the information comes from the International Monetary Fund – the very organisation that told us our economy had a completely clean bill of health, immediately before the Credit Crunch. How can we ever trust anything that comes out of it again?

On the ‘plus’ side, every downgrade of the UK’s predicted economic performance since the Coalition came to power has come true, as near as you like, so I think we can rely on this one.

On the ‘minus’ side, this means the UK economy – our industry, our commerce, our way of life – is in one heck of a lot of doodoo. If you think we’re at rock bottom now, imagine our situation at the end of the year, with 12 months of bat guano beneath rock bottom, and us beneath that.

On the very same day that this announcement came out, the government announced that it is on course to meet its borrowing target for the current financial year.

As I understand it, this is the target that was revised upwards in the Chancellor’s autumn statement, and the bank levy, last January’s VAT increase and debt control measures are helping the government reach it.

So austerity does work, right? The BBC even produced a Germanic-sounding pundit to underline the finding, sort of like: “Ja ja, austerity ist vorkink!” (Thank you, ‘Cultural Stereotypes R Us’, for that one).

But… This is the same government that said a majority of disabled people supported its proposed ‘reforms’ of their benefits (they didn’t) and doctors and nurses approved of its plans to change the NHS (they don’t).

Unemployment recently rose to a high point, in recent years, of 2.68 million – nearly 10 per cent of the workforce. How much is the government spending on benefits for these people?

I feel certain that one of the above-mentioned institutions will be making an apologetic climbdown again soon.

And I doubt it’ll be the IMF.

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