The IMF warns slower pace of deficit reduction may be necessary

Labour Party

It’s finally happening. The International Monetary Fund, hardly a bastion of leftie thinking, has advised the Tory-led coalition, specifically George Osborne, that a slower pace of deficit reduction would be necessary if the British economy continued to grow less rapidly than expected.

This warning came as a result of the IMF cutting its growth forecast for theUKfor the third time in nine months.

The IMF said it was reducing its forecast for theUKto 1.1% this year – down from 1.5% in June, 1.7% in April and 2% at the start of the year. It also predicted a more sluggish recovery in 2012, with activity expanding by 1.6% against the 2.3% it was talking about just three months ago.

Economists at the IMF are of the view that only an improvement inBritain’s trade performance will prevent the economy returning to recession this year. Domestic demand is expected to contract by 0.5%, the weakest of any country in the G7.

Whatever happened to the Tory idea that private enterprise would pick up the slack following the cuts in public spending? Private initiative is clearly sadly lacking, which just goes to show how infantile, flawed and downright ridiculous the government’s “strategy” actually is.

It’s stupid and it’s also tragic for those many people at the sharp end of what the Tory-led coalition is doing.  Many people are losing their jobs and our National Health Service is already beginning to show the effects of Tory cuts.

Yet it need not be as bad as this. Ed Balls, the shadow chancellor, quoted in today’s Guardian said: “These are deeply concerning forecasts for both theUK and world economy. Our chancellor and political leaders inEurope need to wake up to the scale of the problem and finally realise that we need economic growth and more people in work to really get deficits down.”

Meanwhile a Treasury spokesperson stressed that the government has no intention of backtracking on a deficit-reduction plan.

So the government intends to continue with its appalling policies. More people will suffer. It’s Thatcher all over again. Thatcher’s cuts were ideologically driven, and I believe the same in true for Osborne and Cameron. Best not to be anything less than a millionaire in Con-Dem land.