Tories must stay lucid in last chance saloon

GLOBAL markets are in turmoil, the strengthening dollar is hitting all currencies, inflation is rampant and the era of historically low borrowing is ending.

These are indeed trying and anxietyinducing days but Britain is not uniquely engulfed in this mayhem – the entire world is suffering the shockwaves from the Covid lockdown and Russia’s war in Ukraine.

Why, then, has the International Monetary Fund singled out the UK for a humiliating rebuke over its response to the crisis?

The truth is, the organisation detests Liz Truss and Kwasi Kwarteng’s bold low-tax, pro-growth mini-Budget, because it challenges every grinding liberal economic orthodoxy that it and its fellow travellers have preached for more than a decade.

The package, it warns, risks fuelling inflation. Yet the Chancellor’s biggest intervention by far, the £150billion energy bills freeze (which Labour clamoured for), will actually reduce inflation by holding down costs. Compared with this bailout, his fairly minor tax cuts and changes – even if unfunded – are a drop in the ocean.

The IMF also claims the measures will increase inequality, apparently by benefiting high earners. But isn’t it supposed to make economic judgments – not unsolicited and overtly political ones?

And anyway, Britain is far less unequal than many countries, including the US. Will Joe Biden be getting a ticking off?

The fact is, the UK’s tax burden is at the highest since the 1940s. If Mr Kwarteng is to succeed in jolting the sclerotic economy back to life, it simply has to come down.

Of course, IMF forecasts have been wrong for years. That didn’t stop the Government’s enemies seizing on the criticism.

For days, the Bank of England’s response to the growing crisis has been confused and sluggish. But with the markets rattled again, it deserves applause for acting swiftly to stop soaring interest rates collapsing pension funds and hitting homeowners with mortgages.

Ministers insist the tax-cutting Budget will not be torn up. But Miss Truss and Mr Kwarteng are not easing jitters by going missing. And waiting until November to spell out how they will balance the books has needlessly fuelled the crisis.

This is a time for cool heads. With Labour streets ahead in the polls, the Tories are drinking in the last chance saloon.

Changing the leader is not an option. The country will never forgive internecine warfare at this time of catastrophe.