It is probably unfair to say that the Queen’s Speech will have nothing to do with the economy: we are, after all, expecting a deregulation bill among others, which the Treasury hopes will speed things up for small businesses. But if George Osborne looks a little distracted today, it’s probably because his mind is on events outside Parliament. The International Monetary Fund’s team arrives in London today for the start of a fortnight’s inspection of the UK economy. The Chancellor must feel sympathy with teachers who fear the approach of their school’s Ofsted inspection.
Like teachers who suspect their Ofsted visit won’t go their way, Osborne’s allies have recently started to question the wisdom of the IMF, an organisation he has previously set great store by. Chief Economist Olivier Blanchard’s suggestion in April that the Coalition may have reached the point at which it would have to ‘sit down and say maybe our assumptions were not right and maybe we have to slow down’ provoked a round of briefings about the internal IMF battles over austerity. Jeremy Warner has also written a forceful assessment of the IMF’s struggle for ideas.
George Osborne was also one of Lagarde’s key backers when she was in the running for the Managing Director job: this latest report will be a test of whether she feels she owes the British Chancellor anything.
Mind you, the IMF tends to produce assessments so oblique that anyone occupying any part of the political spectrum can find something to cheer them and something else with which to prod their enemies. Because they are produced in tandem with governments, it is nearly always a matter of read between the lines. But it will be interesting to see how the Treasury deals with its own economic Ofsted report when it comes out: if it’s bad, will it continue to brief against the organisation’s officials? And will ministers conveniently forget their beef with Blanchard if Christine Lagarde announces that the official view of the organisation is that the UK needs to keep plodding along on its current course?