IMF verdict on the UK economy: the good, the bad, and the ugly

The International Monetary Fund published its long-awaited Ofsted report on the UK economy this afternoon. As usual, the written assessment contains enough to keep everyone on all sides of the debate happy, but while avoiding telling the government to abandon Plan A, it does instruct George Osborne to invest in supply-side measures to boost growth, warning that ‘planned fiscal tightening will be a drag on growth’. Here’s a summary of the good bits from the IMF’s concluding statement, the awkward bits, and the downright bad news.

You can read the full concluding statement here.

The Good

• The Government’s ‘essential’ plan for cutting the deficit has earned it credibility, the IMF said. But it also praised ‘welcome flexibility in its fiscal program’, which is a positive way of pointing out that ministers aren’t exactly rigidly sticking to Plan A anyway.
• There has been ‘some improvement in economic and financial conditions’.
• The IMF was impressed with monetary policy, which it said was ‘vigorous and appropriate’.