THE GOVERNMENT’S resolve to cut the deficit will not be tested by dismal new IMF economic forecasts, Prime Minister David Cameron said yesterday, instead suggesting the government would attempt supply-side reform to bring growth.
The IMF said the government should delay some spending cuts scheduled for next year if economic data failed to improve, but Cameron said the government would not soften its austerity plans.
“What we need in Britain is not ‘Plan B’, which is more borrowing,” the Prime Minister told Sky News, “How can you borrow your way out of a debt crisis?”
“What we need is what I call ‘Plan A+’,” Cameron added. “We need to keep our plans, difficult though they are...but we need to add to that every measure that business has been asking for – and that’s what we’re doing.”
But shadow chancellor Ed Balls called the downgraded IMF forecasts “another damaging blow to the government’s economic credibility,” calling on the coalition to expand the deficit even further through tax cuts and infrastructure spending, in order to boost growth.
Tullett Prebon boss Terry Smith said we should give no credence to the most recent IMF figures, as previous sets have all been overly-optimistic. Calling the IMF “another institution we can no longer trust” he said the body has “no regard for facts, the correct course of action, or any pesky questioning of its policies.”