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11 April 2011

So exactly who does agree with Osborne?

The voice of the IMF can now be added to the ever-growing chorus denouncing the measures of the Chan

By David Blanchflower

George Osborne has consistently claimed that every international organisation supports his policy positions. Interestingly, he fails to mention the growing consensus among commentators that his package of measures is ill-conceived and likely to push the UK into recession.

This is pretty much the position of most economic commentators ­- I place myself in that camp along with Martin Wolf and Sam Brittan (Financial Times); Anatole Kaletsky (the Times); Larry Elliott (the Guardian) and Bill Keegan (the Observer). It is also the position of Nobel Prize-winners Paul Krugman, Joe Stiglitz and Chris Pissarides.

George Soros in interviews at the Bretton Woods conference this weekend argued that fiscal austerity was not appropriate when recoveries were fragile.

Larry Summers, Obama’s ex-chief economic adviser, described Osborne’s so-called contractionary fiscal expansion as “oxymoronic”.

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Then, today, the IMF lowered its 2011 UK growth forecast from 2.0 per cent to 1.7 per cent. It maintained its forecast for 2012 at 2.3 per cent. Interestingly, the IMF raised its 2011 forecasts for Germany, Italy, Spain, Canada and Russia.

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The OECD, in its composite indicators released today, is suggesting a period of low growth. If these are the best endorsements you can get, George, you are in trouble.

Also of interest is that a number of the CEOs who wrote a letter to the Telegraph supporting Osborne’s measures six months or so ago are now backtracking as the high street sales crumble. And Andrew Sentance’s pointless claims over the weekend that rates may quadruple in the next year are also likely to scare off the consumers even further. MPC members are supposed to do no harm.

Oh dear, George. Things are not looking so good.