A few months ago, colleagues of George Osborne were worried the Chancellor risked ‘banking the recovery’ too early. If they’re still worried about that, then Osborne certainly isn’t. Today he’s delivering a speech attacking economic pessimists who he says can be proven wrong: ‘Our nation’s best days lie ahead’. He will say:
‘The evidence increasingly shows that monetary policy, broadly defined and effectively deployed, can work but with two caveats. Banks need to be well capitalised so that the monetary transmission system is working. And there needs to be credible fiscal policy.’
His speech will also characterise what ‘proponents of secular stagnation’ argue for: ‘further fiscal stimulus and higher government debt’.
Who is the Chancellor talking about here? Well, Ed Miliband has been out and about ‘ridiculing‘ the Government’s claims that the economy is mending. He still thinks that there are sufficient numbers of voters who still feel as though life is very tricky (and for whom a ‘savings revolution’ in the recent Budget seems rather pointless when they’re trying to spin their pay check out to the end of the month, let alone put away £15,000).
But Osborne is delivering this speech in Washington, where he is attending the spring meetings of the IMF and the World Bank. The IMF is once again a wise and prescient organisation after it upgraded Britain’s growth forecast for this year to 2.9%, making it the fastest growing of any of the G7 economies. Osborne wants to remind the organisation of the ‘playing with fire’ remarks of its chief economist Olivier Blanchard. Osborne wants to bank the recovery for sure – and bank that he was right about it, too.