The IMF spoils the coalition's relaunch

Forecast for UK growth is downgraded by more than any other G8 country.

David Cameron is increasingly keen to draw attention to what he calls the coalition's "achievements": cutting the deficit by a quarter, capping benefits, creating hundreds of new academies, reforming public sector pensions and so on. We learned today that the government will shortly publish a "mid-term review" highlighting its "successes". But the IMF has just provided a reminder of one of the coalition's failures: its inability to generate growth.

In its latest World Economic Outlook, the Fund downgraded its forecast for UK growth by more than any other G8 country. It now expects the UK to grow by just 0.2 per cent this year (down from a previous forecast of 0.8 per cent) and by 1.4 per cent next year (down from 2 per cent). The Q2 GDP figures, which will be released this month, will almost certainly show that we remain in recession, a further blow to George Osborne's diminished authority.

But in his defence, Osborne will point out that the IMF has again endorsed his deficit reduction plan. It states that the UK has "appropriately maintained its commitments to balance the structural current budget within five years and to put net debt on a declining path, with additional consolidation in store in 2015–17." Despite previously stating that the UK should enact fiscal stimulus (through "temporary tax cuts and greater infrastructure spending")  if activity continues to "undershoot current expectations" (which it has), the IMF appears to have fallen prey to another bout of fiscal hawkery.

Chancellor George Osborne leaves 11 Downing Street on July 10, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Tom Watson rouses Labour's conference as he comes out fighting

The party's deputy leader exhilarated delegates with his paean to the Blair and Brown years. 

Tom Watson is down but not out. After Jeremy Corbyn's second landslide victory, and weeks of threats against his position, Labour's deputy leader could have played it safe. Instead, he came out fighting. 

With Corbyn seated directly behind him, he declared: "I don't know why we've been focusing on what was wrong with the Blair and Brown governments for the last six years. But trashing our record is not the way to enhance our brand. We won't win elections like that! And we need to win elections!" As Watson won a standing ovation from the hall and the platform, the Labour leader remained motionless. When a heckler interjected, Watson riposted: "Jeremy, I don't think she got the unity memo." Labour delegates, many of whom hail from the pre-Corbyn era, lapped it up.

Though he warned against another challenge to the leader ("we can't afford to keep doing this"), he offered a starkly different account of the party's past and its future. He reaffirmed Labour's commitment to Nato ("a socialist construct"), with Corbyn left isolated as the platform applauded. The only reference to the leader came when Watson recalled his recent PMQs victory over grammar schools. There were dissenting voices (Watson was heckled as he praised Sadiq Khan for winning an election: "Just like Jeremy Corbyn!"). But one would never have guessed that this was the party which had just re-elected Corbyn. 

There was much more to Watson's speech than this: a fine comic riff on "Saturday's result" (Ed Balls on Strictly), a spirited attack on Theresa May's "ducking and diving; humming and hahing" and a cerebral account of the automation revolution. But it was his paean to Labour history that roused the conference as no other speaker has. 

The party's deputy channelled the spirit of both Hugh Gaitskell ("fight, and fight, and fight again to save the party we love") and his mentor Gordon Brown (emulating his trademark rollcall of New Labour achivements). With his voice cracking, Watson recalled when "from the sunny uplands of increasing prosperity social democratic government started to feel normal to the people of Britain". For Labour, a party that has never been further from power in recent decades, that truly was another age. But for a brief moment, Watson's tubthumper allowed Corbyn's vanquished opponents to relive it. 

George Eaton is political editor of the New Statesman.