Will the UK government need the assistance of the IMF?
The ongoing criticism of the UK government and its handling of the economic crisis by the IMF has created many headlines across the world. Even though the UK government has on a number of occasions refuted suggestions that they will at some stage need to go cap in hand to the IMF for a bailout package, there are concerns that unless we see an economic recovery in the short to medium term the UK could start to fall away again.
Not since the 1970s have we seen the UK appeal for rescue funding to the IMF and while many have discounted the possibility there is no doubt it is a concern in the back of many minds. The UK budget deficit is set to hit £175 billion, national debt could be anywhere between £1 trillion and £3 trillion before it starts to fall back and unemployment is moving higher and higher at a faster and faster rate. This is not the background to a short-term recovery even though the UK government and the Bank of England continue to pile of billions upon billions of pounds into the economy.
The UK government is not a bottomless pit and with little return on investment into the economy so far there will be pressure on lending terms if further significant funding is required.
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