Austerity. The case for London.

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From Mehdi’s Morning Memo : The Triple Dip ? The ten things you need to know on Sunday 21 April 2013…

It’s been a bad week for the chancellor, with Tuesday seeing the IMF savage his austerity policies, Wednesday seeing unemployment going up, Friday seeing Fitch become the second credit rating agency to downgrade the UK’s once-coveted triple-A rating and Saturday seeing the Treasury Select Committee attack the chancellor’s flagship Help to Buy mortgage scheme.

But it could get even worse this week – « Triple dip threat to the Chancellor » is the headline on the front of the Sunday Times :

« George Osborne is braced for more bad news this week with figures for the first three months of the year that could show the economy has slipped back into an unprecedented « triple dip » recession.

« Economists say growth in the first quarter will have been 0.1% at best. There are fears, however, that last month’s cold weather and falling construction output might actually have caused the economy to contract. »

The paper adds that « a senior International Monetary Fund (IMF) official yesterday urged Osborne to reconsider his plans. David Lipton, the IMF’s first deputy managing director, told Sky News his spending cuts and tax hikes should be re-examined in the light of weak economic news.

« Lipton, who will next month be part of the team carrying out the IMF’s annual analysis and recommendations for Britain, said : ’The Fund’s view is clear : the UK economy has turned out to be somewhat weaker than had been foreseen, so our view is that the pace of consolidation ought to be reconsidered.’ »

The chancellor’s friends in the press are trying to mount a fightback. The Sunday Telegraph’s Kamal Ahmed describes the IMF as « an institution stifled by bureaucracy and inherently secretive » and says « Mr Osborne is right to set his jaw against the IMF dabbling too deeply in UK politics ». The problem, of course, is that it was the chancellor who encouraged the IMF’s interventions in our domestic politics back in the days when, conveniently, the IMF was on his side of the argument.

Other former allies of the chancellor are also taking potshots at him – the Sunday Telegraph reports that the ex-defence secretary Liam Fox, will add to Osborne’s woes by issuing « a Thatcherite call to arms this week by demanding that the Conservatives focus on creating wealth rather than concentrating solely on economic growth ».

 

In the Sunday Times. « Triple dip threat to chancellor » –http://www.thesundaytimes.co.uk/sto…

 

The Telegraph. « George Osborne should take on the mighty » IMFhttp://www.telegraph.co.uk/finance/…

 

The Telegraph. Liam Fox : « Tories must harness Thatcher and back wealth creators ». http://www.telegraph.co.uk/news/pol…

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