Reply #20: We'll have to go begging to the IMF, says Cameron (Britain)

[Demeter]

http://www.independent.co.uk/news/uk/politics/well-have-to-go-begging-to-the-imf-says-cameron-1513416.html

By Andrew Grice, Political Editor and Sean O'Grady
Friday, 23 January 2009


Britain risks bankruptcy and a humiliating bailout by the International Monetary Fund (IMF) because of Gordon Brown's borrowing, David Cameron said yesterday. With official confirmation that the economy has entered recession expected today, the Tory leader delivered his strongest warning yet: "If we continue on Labour's path of fiscal irresponsibility, at some point – and it could be very soon – the money will simply run out."

His speech to the Demos think-tank in London raised the spectre of the 1976 bailout, when James Callaghan's Labour government was forced to make deep public spending cuts in return for a £2.3bn loan from the IMF...

As in 1976, investors' concerns are putting sterling under severe selling pressure. So far the depreciation of the pound – down to 23-year lows against the dollar and the subject of discussions within the G7 – has failed to bring in more export orders. UK car production has slumped 47 per cent on last year, it was revealed yesterday.

The human costs of the downturn are being laid bare. Repossessions almost doubled in the third quarter of last year, according to the Financial Services Authority. A total of 13,161 properties were reclaimed by banks and building societies during the three months to the end of September – 92 per cent more than during the same period of 2007, with arrears also escalating. An increasing number of families are turning to their local authorities to house them, with the number on council waiting lists now 1.77 million – up 100,000 on last year....

The economy is expected to stumble further during 2009 – by as much as 2.8 per cent, according to the European Commission forecast on Monday. The Governor of the Bank of England, Mervyn King, declared earlier this week that the world economy had "fallen off a cliff" in recent months, a verdict few seem ready to dispute.