Good evening, welcome to tonight's Unspun with Tom Gordon.
JEREMY Hunt was fretting a lot about “declinism” in his first speech as Chancellor this year.
The idea that the UK’s best days are behind it “was wrong in the past and it is wrong today,” he insisted on Friday.
The IMF’s World Economic Outlook, published yesterday, helps explain his choice of topic.
It looks like Mr Hunt was trying to get his defence in early.
The report doesn’t say declinism is right, but it offers precious little optimism to challenge that view.
Read more: Brexit blamed as UK set to be only major economy to decline
Relative to its peers, the UK’s outlook is singularly bad.
Uniquely among the advanced G7 nations, our economy is forecast to shrink this year.
In October, the IMF said UK GDP would grow 0.3 per cent in 2023. Now it says it will contract by 0.6%, a downgrade of 0.9 points, the biggest drop of any country in the report.
The forecast for Germany is a rise of 0.1%, for the US a rise of 1.4% and for Japan 1.8%.
Even sanction-bound Russia is set to grow more than the UK, its GDP up 0.3%, thanks to the higher prices it can find for its oil and gas as a result of its war in Ukraine.
True, the IMF also upgraded its forecast for UK GDP in 2024.
Read more: Brexit: Lack of hope down to politicians as people wake up
But that 0.9% growth still ties us at the bottom of the G7 growth league with Japan and Italy. Global output is expected to grow by 3.1%.
The best that Mr Hunt & Co could manage yesterday was to point out IMF forecasts - like all forecasts - were wrong sometimes.
“I think Britain can outperform just like we have done and beat these forecasts,” said transport minister Richard Holden.
But even beating the forecasts handsomely could still leave us at the bottom of the G7 growth table, especially if the IMF has under-estimated others’ growth too.
The SNP said Brexit was to blame, while Labour said the particular “Brexit deal” struck by the UK Government under Boris Johnson was a factor.
The IMF report didn’t actually mention Brexit, although its chief economist came close when he said UK employment levels had not recovered since the pandemic - meaning there was “less output, less production” - a veiled nod to the end of free movement.
Read more: UK economy set to shrink as unique negative growth predicted
The report was more explicit about what the Government and Bank of England have done.
The downgrade in UK growth reflected their “tighter fiscal and monetary policies”.
In other words, record tax levels and interest rate hikes, neither of which is going away soon.
Mr Hunt has warned us not to expect tax cuts in March’s budget, while the Bank is tomorrow expected to raise interest rates for a 10th time in a row, from 3.5 to 4%.
Bigger bills should help lower inflation by cutting spending power but that slows the economy as well. In his first big speech of the year, Rishi Sunak vowed to grow it.
There is indeed a declinism at large in the country today.
The decline of this Government, decline in public trust in the Tories and declining support for their signature policy of Brexit.
You don’t need the IMF to tell you that. However its report does fit snugly into that narrative.
Mr Hunt is right to be nervous.
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