Niall Ferguson: Britain should call the IMF now

Should David Cameron just call the IMF immediately? Like, on Monday? This argument has been doing the rounds in Tory circles and tomorrow’s Spectator has an important contribution from Niall Ferguson. He advises that Cameron takes a two-pronged approach. Prong one is to ‘axe ruthlessly’ and prong two is to call the IMF.

He says:

‘There is a very real danger that [things] could now spiral, Greek style, out of all control if foreign confidence in sterling slumps and long-term interest rates rise. Mr Cameron needs to do two things right away. He must instruct George Osborne to wield the axe ruthlessly with the aim of returning to a balanced budget over a credible eight- to ten-year timeframe. That means not only reversing Labour’s disastrous expansion of public sector spending, but also encouraging business growth with incentives to innovate, invest and work. At the same time, he needs to initiate talks with the IMF in case external support proves to be necessary.