Forex News

Larger IMF contributions will be a hard sell for Osborne

19/01/12 @ 09:47 GMT by Michael Derks, Chief Strategist

Although the Chancellor seems minded to raise the UK’s contribution to the IMF as part of a concerted global push to raise the latter’s firepower, it will likely be a very hard sell to members of his own party. In addition, should he choose to go ahead, it will not do the currency any favours. Back in the summer, MPs reluctantly signed off on an extra GBP 10bln, but eurozone members are hoping that this will be raised to GBP 30bln. Yesterday, the IMF announced that it was hoping to tap members for an additional USD 600bln. At a time of excruciating fiscal austerity, this issue has the capacity to hurt the political standing of the government, and could trigger a re-examination by foreign investors of the government’s commitment to fiscal consolidation.

Tags: IMFUK

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Michael Derks

Chief Strategist

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