The IMF delivers its verdict

While Dominque Strauss-Kahn was in a New York court room, pleading not guilty to charges of sexual assault, his former IMF colleagues were delivering their verdict on the UK economy at the Treasury. The IMF are very polite guests and their report has provided some timely support for the coalition’s fiscal approach by declaring that there is currently no need for a Plan B.

The Osborne operation has been quick to point out that even in various alternative scenarios the IMF set out in their report, they don’t call for more spending or smaller cuts.

But there are things which the IMF says that won’t be music to Osborne’s ears. Most prominently of these is their predictable down-grading of growth and their emphasis on how the VAT hike has fuelled inflation.

The IMF also picks up on something that has been puzzling a lot of us recently, ‘the unusually large disconnect between recent weak GDP outturns and other indicators that are stronger (e.g.,