Osborne is set to break his golden debt rule

The IMF's warning that Osborne will miss his debt target spells trouble for the Chancellor.

After slashing its forecasts for UK growth earlier this week, the IMF has just delivered its full verdict on the state of the British economy and it makes grim reading for George Osborne. Noting that "the big picture on growth is one of stagnation since late-2010", the Fund repeats its call for Osborne to prepare a plan B if the economy fails to recover.

The planned pace of structural fiscal tightening will need to slow if the recovery fails to take off even after additional monetary stimulus and strong credit easing measures.

And there's more. It expects economy to "grow modestly" but warns that "current policy settings" mean the UK could suffer a "permanent loss of productive capacity".

But worst of all for Osborne, the Fund predicts that he will miss his target for national debt to be falling as a percentage of GDP by 2015-16. The man who mocked Gordon Brown for breaking his "golden rule" is set to do the same. "Under... weaker medium-term growth projections, the net debt target is expected to be met one year late," the IMF says. Government debt is now expected to rise from 78.8 per cent of GDP in 2014-15 to 79.9 per cent in 2015-16.

While Osborne's arbitrary targets are of little economic importance they are of immense political significance. Should he abandon his debt rule, the UK could lose its AAA credit rating. Standard & Poor's, for instance, has previously warned that our top rating is conditional on Osborne meeting his fiscal mandate. But why should we listen to the discredited agenices that rated Lehman Brothers and AIG as "safe investments" days before the crash? The answer is simple: we shouldn't. But this doesn't alter the fact that Osborne did. Having adopted the UK's credit rating as his metric of success (he once boasted that the UK was "the only major western country which has had its credit rating improve") he can hardly change tact now. 

The alternative, of course, is for Osborne to announce billions more in spending cuts and tax rises in a desperate attempt to meet his target. But that would only further reduce growth, meaning that he might miss his target anyway, and would hardly endear him to voters already bruised by austerity. The truth is that for Osborne, who arrogantly dismissed well-intentioned critics as "deficit deniers", there are now no good options.

George Osborne will his target to reduce the national debt, warned the IMF. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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“It was like a religious ceremony”: What happened at Big Ben’s final bong?

Both inside and outside Parliament, people gathered to hear the clock’s final midday chime before undergoing repairs.

“It’s just hacks everywhere,” a photographer sighs, jamming his lens through a gap in Parliament’s railings to try and get a closer look.

New Palace Yard, Parliament’s courtyard directly below Big Ben, is filling with amused-looking journalists, waiting for the MPs who have promised to hold a “silent vigil”, heads bowed, to mark Big Ben’s final chime before four years of silence while the tower’s repaired.

About four of them turn up. Two by accident.

It’s five minutes to twelve. Tourists are gathering outside Westminster Tube, as tourists do best. A bigger crowd fills Parliament Square. More people than expected congregate outside, even if it’s the opposite within the Palace. The world and his phone are gazing up at the sad, resigned clock face.


“It’s quite controversial, isn’t it?” one elderly woman in an anorak asks her friend. They shrug and walk off. “Do you know what is this?” an Italian tourist politely asks the tiny press pack, gesturing to the courtyard. No one replies. It’s a good question.

“This is the last time,” says another tourist, elated, Instagram-poised.

“DING DONG DING DONG,” the old bell begins.

Heads down, phones up.


It finishes the on-the-hour tune for the last time, and then gives its much-anticipated resignation statement:

“BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG.”

Applause, cheers, and even some tears.


But while the silly-seasoned journalists snigger, the crowd is enthusiastic.

“It’s quite emotional,” says David Lear, a 52-year-old carer from Essex, who came up to London today with his work and waited 45 minutes beneath Big Ben to hear it chime.

He feels “very, very sad” that the bell is falling silent, and finds the MPs’ vigil respectful. “I think lots of people feel quite strongly about it. I don’t know why they’re doing it. During the war it carries on, and then they turn it off for a health and safety reason.”

“I don’t know why they can’t have some speakers half way down it and just play the chime,” he adds. “So many tourists come especially to listen to the chime, they gather round here, getting ready for it to go – and they’re going to switch it off. It’s crazy.”

Indeed, most of the surrounding crowd appears to be made up of tourists. “I think that it was gorgeous, because I’ve never heard him,” smiles Cora, an 18-year-old German tourist. “It was a great experience.”

An Australian couple in their sixties called Jane and Gary are visiting London for a week. “It was like a religious ceremony, everybody went quiet,” laughs Gary. “I hope they don’t forget where they put the keys to start it again in four years’ time.”

“When we first got here, the first thing we did was come to see it,” adds Jane, who is also positive about the MPs who turned up to watch. “I think it’s good they showed a bit of respect. Because they don’t usually show much respect, do they?”

And, as MPs mouthing off about Big Ben are challenged on their contrasting reactions to Grenfell, that is precisely the problem with an otherwise innocent show of sentimentality.

Anoosh Chakelian is senior writer at the New Statesman.