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Prepare to scale back austerity cuts, IMF tells UK

Consider cutting the base interest rate even lower, International Monetary Fund tells UK authorities.

 
Prepare to scale back austerity cuts, IMF tells UK

The UK government should scale back its plans for deeper austerity cuts if it is unable to kick-start an economic recovery even with more aid measures from the Bank of England, the International Monetary Fund (IMF) has cautioned.

Warning of the risks to the stagnant British economy posed by public and private sector cuts, as well as the eurozone crisis, the IMF again said the Bank should continue cutting rock-bottom interest rates to below 0.5%. The Bank's monetary policy committee has discussed cutting rates in recent months, but so far rejected the idea.

Bank balance sheets should be strengthened, the fund said. It called for chancellor George Osborne to squeeze more out of his red briefcase, while keeping the budget neutral, with more investment spending funded by property tax reform or spending cuts.

The review of the UK's finances cautions that the coalition government may have to refrain from plans for greater fiscal consolidation if the ‘sluggish’ economy ‘does not build momentum even after further monetary and credit easing measures’. The Bank of England’s monetary stimulus – which includes the recently enlarged £375 billion quantitative easing scheme – has been bold, the IMF said.

‘A stalling recovery, high unemployment and uncertain external conditions continue to present significant challenges,’ the report says.

On Monday the IMF drastically cut its forecasts for UK economic growth to just 0.2% for this year and 1.4% in 2013.

13 comments so far. Why not have your say?

Roger Savage

Jul 19, 2012 at 17:38

IMF = Incredibly Moronic Fools

I know, why don't we have negative interest rates and pay people to have loans and make savers pay to give them a loan?!!!!

Maybe I shouldn't type that - it probably will give the IMF and BoE a stupid new idea.

Or, let's accept that the easy credit culture that caused all the problems (together with totally changing people's attitudes to debt -to the detriment of society) isn't worth perpetuating at the expense of everything else that makes sense.

Time the prudent were winning again, not the feckless.

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Alan Tonks

Jul 19, 2012 at 17:41

Yes what a cracking idea, I think the “economists” in command of the geriatric lady would definitely agree.

I think the IMF (International Moron Fund) like a lot of financial institutions, are hiring from the lunatic fringe.

As we are living in a fantasy land, why not go the whole hog and reduce interest rates to a minus % stupid idiots.

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David Rowse

Jul 19, 2012 at 18:43

Alan

I am afraid that not all are living in a fantasy land and there are many, many hard working subjects of this country who are growing ever more desperate as they see so called leaders totally inadequate in coming up with any kind of 'solution'.

I have three grown up children, married with their own children and in full time jobs (my youngest son has two) who are really struggling and finding it increasingly difficult to manage. They try to remain cheerful in ever more depressing times, whilst our egotistic 'leaders' lead us into ever more debt and increasing despondency.

Increasingly we appear to becoming two nations - London, where megabucks are made and wealth accumulated; the rest of the UK where we are expected to make ever increasing sacrifices to support such a life style. David, where is your 'big society' now?

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Roger Savage

Jul 19, 2012 at 21:03

David, I wonder if the idea is to lead us into more debt and increasing DEPENDENCY.

Certainly they seem intent on making borrowing as attractive as possible. If everyone gets hooked on cheap debt, it's a perfect basis for control further down the line.

I'm sure Alan's fantasy land comment does not negate your quite correct observation there are many hard working people but equally the 'leaders' have no interest in a solution and I think this is where fantasy land comes in quite frankly.

Printing money, almost zero interest rates - they're not solutions - to believe so would be fantasy. But let's not forget though that this started with Blair and his cronies - they liberalised debt and changed people's attitudes to it whilst enriching themselves and furthering their own grubby careers.

I would argue that there's a bigger picture out there in terms of what's going on. It would be a mistake to think that the BoE or politicians are incompetent fools. It's almost easier to believe this than believe what I think could be the true motivations behind their actions (even beyond one motive that becomes ever clearer - ensuring hyperinflation).

I think they're much more devious than simple fools - their policies are calculating and ultimately evil with a much wider agenda.

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Brian Kneller

Jul 19, 2012 at 21:38

Roger Savage, I agree there is an hidden agenda . It is clear they wish to maintain the status quo so how are we going to reduce the debt burden ..... currency devaluation -- possibly by stealth - quantitative easing ? and by raiding the sector which has money -- the pensioners -- the pensioners are not in a good place since they have no capacity to recover by earning any form of substantial return. And why the heck should they most have paid taxes and saved. I fear we have not seen the end of this disaster if I could immigrate I would. Meanwhile the bankers are making a statement by organising a large party -- that says a lot -- maybe they are saying we're OK and up yours???

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Roger Savage

Jul 19, 2012 at 21:59

Totally agree Brian - one bank bailout was bad enough but to keep going back for more and for the BoE to be helping them and the IMF cheering on from the sidelines, something is very wrong indeed.

It does feel as if the BoE, the banks and the politicians are indeed just laughing at the prudent members of society and rewarding the reckless at every turn.

Annuity rates for pensioners are shocking at the moment and, as you say, they have saved and paid taxes all their lives for this 'reward'.

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Rose G

Jul 20, 2012 at 11:37

I am not a conspiracy theorist, but I do believe that we are being taken for mugs and off course, with the stiff upper lip mentality, not taking to the streets like the Spanish or the Greeks are doing.

There is a hidden agenda and that is for us to be in more debt than ever - the government is inflicting this debt on those who have saved, who want to save, while those who do not, like our nasty banking fraternity at the very top, they do not believe in saving, they believe in taking huge risks with their clients money, and get handsomely rewarded for it - why should they stop this behaviour.

The regulatory bodies, the IMF, BoE, our politicians and the bankers alike are going to turn us into raving lunatics because quite frankly, there is no end in sight to the austerity we ordinary folks have to face, just so our banking industry can continue with their profligate behaviour.

I at some point believed they were lunatics running the asylum, but now firmly believe that they are all in it together to get a work force who are going to be taxed until it numbs us into compliance. We have no way to actually get the politicians to do anything remotely decent for all of us, it is all about the City of London, bankers and their buddies in Westminster.

Perhaps we should look closely at why Gordon, the one eyed king did what he did by allowing his buddies in the banking world to get away with murder - do you not believe that as a Scotsman, someone who did not quite fit into the Westminster ethos, had to have done what he did do to the regulatory side of banking because he wanted to bankrupt England?

I believe we are facing some of the most difficult times since the England was at war, now the destruction of our way of life is being imposed on us by dullards at Westminster who have no mercy or any soul worth redeeming.

I am firmly of the belief that we know very little about who is pulling whose string, the puppets look like the puppet master, while the puppet masters are behind the scene, inflicting wounds on us while they sit on their mountains of cash, clapping their hands with glee - these people have let the power invested in them, get to their heads.

Seriously, you cannot make up some of the stories that are being revealed almost on an hourly basis!

If this is not a conspiracy against the people in England, I do not know what it will take to actually convince anyone.

The Ikes of the world maybe easily relegated to the madhouse, while the actual megalomaniacs are actually doing the damage, with no end in sight.

As for the Olympics, what a bloody mess - Seb Coe should have stuck to running, he was good at it. I would not work in any business he had a hand in, he has not got a clue! Londoners especially have been taken for a ride, just the bill for security could bankrupt a country and yet here we are awarding contracts for security to a company who cannot keep track of their prisoners, are they are going to be allowed to keep us safe, god forbid that we actually need them!

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Alan Tonks

Jul 20, 2012 at 11:53

Rose G, I couldn’t agree more, but I think it is the whole of the United Kingdom that is targeted.

I am sure you are right there is a hidden agenda, the alternative is they are all raving lunatics, take your pick.

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Rose G

Jul 20, 2012 at 14:12

I believe that those who make the rules for us to live by have completely lost the plot or are being instructed by aliens who no longer require human beings to do the graff, they have the technology to get the gold/oil/minerals out the earth with little effort.

The bogus food crisis just beeen announced, while half the world's population are obese - who is having a joke? Perhaps we need to eat less, use less of the earth's resources and we may have some chance.

Oh no, eat more, buy more, throw away more because your country (& it's shitheaded leaders) need you!

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Brian Kneller

Jul 20, 2012 at 15:19

The thing that frustrates me the most is I don't see a way out both on a personal and on a UK wide basis without a substantial change in attitudes etc.. which we are not going to get from those in power and with influence. Meanwhile all we do is chew the cud. Perhaps this is how empires do really end, with corruption at the top, and an apathetic and disenfranchised majority the remaining population.

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Alan Tonks

Jul 20, 2012 at 20:01

Well the Roman Empire didn't fall from the outside, it fell from within.

Empires never fall when they are strong; they only fall when they are weak.

That also goes for countries, as we hardly have an Empire now do we.

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John Gilbert

Jul 21, 2012 at 20:35

All that is necessary for the triumph of evil is that good men do nothing. I think you are all correct in almost all respects except for one and that is that we can do nothing. It is time for good "men" (and that is the familly of man for those who may think I've excluded women) to do something.

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Brian Kneller

Jul 21, 2012 at 21:17

John, Agreed but what ?

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