The IMF has given Darling permission to dig a deeper hole

For more than 30 years the initials IMF have blown an icy chill through the corridors of the British Treasury.

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For more than 30 years the initials IMF have blown an icy chill through the corridors of the British Treasury. It was the arrival in 1976 of two officials from the International Monetary Fund that marked the collapse of Britain’s economic credibility in the aftermath of an inflation onslaught and which paved the way for the “winter of discontent” and the fall of the Callaghan Labour government.

But fast forward to 2008, barely five weeks before the unveiling of a problematic budget, and no more welcome lifeline could have been thrown to an increasingly desperate Treasury than that from the new head of the IMF, Dominique Strauss-Kahn.

In an astonishing volte-face, he departed from the standard finger-wagging IMF script of tight fiscal discipline and called on other countries to follow the US example of a fiscal stimulus package “to get out of the turmoil we are in”.

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