IMF Article IV concluding statement: remarks by the Chancellor of the Exchequer

Chancellor's statement at the conclusion of the IMF's 2014 Article IV assessment of the UK.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Chancellor of the Exchequer George Osborne giving a speech

I am delighted to welcome Christine Lagarde and her team to the Treasury for the annual International Monetary Fund (IMF) Article IV assessment of the UK.

IMF scrutiny of country, regional and global economies is a vital part of their role in supporting global stability.

I thank them for their thorough work over the past couple of weeks.

This year the IMF forecast that the UK will be the fastest growing major advanced economy in the world.

They say today that growth is becoming more balanced, with encouraging signs that business investment is picking up.

And they give their unequivocal support to our economic plan.

As they say, “the planned fiscal adjustment this year is appropriate” and “over the medium term, fiscal policy should continue to aim to put debt on a firmly declining path.”

I couldn’t put it better myself.

But we must not be complacent. And the IMF today remind us that there is a long way to go - and many risks to our recovery.

Risks abroad – in emerging markets, in the euro area, and with increased geopolitical tensions – and risks at home.

So we have to make Britain more resilient.

That’s why we have to continue to work through our plan to eliminate the deficit and move this country into surplus; and why at the Budget I took steps to make sure we save more, we manufacture more, and we export more.

In the long term, as the IMF put it, “the durability of the recovery depends on productivity growth”.

So we have to work through our plan to cut tax on investment; and to see through our historic infrastructure programme – even when that is controversial.

On unemployment the IMF note that it has fallen rapidly but remains too high.

I agree – that’s why we’re cutting jobs taxes instead of increasing them, and it’s why our welfare reforms are vital in order to ensure that work always pays.

I also agree with the IMF that we need to remain vigilant for any risks that might emerge in the housing market.

That’s why I have given the Financial Policy Committee new macro-prudential tools should they see a risk to financial stability – and as I’ve made clear that includes recommendations to me on the parameters of the Help to Buy scheme.

The only long term answer to Britain’s housing problems is to build many more houses in this country.

That’s why we’ve reformed our planning laws – with new permissions rising and house building up a quarter over the last year.

But the biggest risk to our recovery would be to abandon the economic plan that is working.

This for me is the most important conclusion.

Today’s IMF report shows that our long term economic plan is the right one.

The British economy is firing on all cylinders.

The IMF say we are right to carry on tackling Britain’s budget deficit, fixing the banking system and backing businesses to create jobs.

But they are right also to remind us that many risks remain and that the task is far from done.

I agree, so we will get on and finish the job.

And now I’d like to ask you all to welcome Christine Lagarde who will set out the IMF’s findings in detail – and answer your questions afterwards.

Thank you.

Published 6 June 2014