{"id":93408,"date":"2025-09-09T21:18:00","date_gmt":"2025-09-09T21:18:00","guid":{"rendered":"https:\/\/sotnews.agency\/?p=93408"},"modified":"2025-09-09T21:18:00","modified_gmt":"2025-09-09T21:18:00","slug":"badenoch-worried-uk-may-need-imf-bailout","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=93408","title":{"rendered":"Badenoch \u2018worried\u2019 UK may need IMF bailout"},"content":{"rendered":"
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Kemi Badenoch has said she is \u201creally worried\u201d that the UK might be forced to embark on a 1976-style bailout from the International Monetary Fund (IMF).<\/p>\n

The Conservative leader told BBC Newsnight that the UK could be forced to go \u201ccap in hand\u201d to the IMF unless the government delivers a plan for economic growth.<\/p>\n

She made her remarks as she offered to work with Sir Keir Starmer \u201cin the national interest\u201d to cut welfare spending, saying cuts and growth were needed to help the government out of a \u201cdoom loop\u201d of rising taxes and precarious public finances.<\/p>\n

Speaking in Parliament on Tuesday, Chancellor Rachel Reeves said Badenoch was \u201ctalking down our economy in a desperate attempt to get attention\u201d.<\/p>\n

\u201cThe only thing in Britain that needs a bailout is the Tory party from its failed leadership,\u201d Reeves added.<\/p>\n

The Labour government of the late Prime Minister Jim Callaghan was forced to apply for a $3.9bn (\u00a32.9bn) emergency loan from the IMF during the 1976 sterling crisis.<\/p>\n

That was seen as a seminal event in post-war economic history, which severely undermined the economic credibility of the Callaghan government.<\/p>\n

Asked what made her think the UK is heading towards the need for an IMF bailout, Badenoch said: \u201cA lot of the indicators are pointing in that direction.<\/p>\n

\u201cMany very well respected commentators and economists are saying this.\u201d<\/p>\n

A number of economists, mainly on the right, have in recent weeks raised the prospect of a version of the 1976 sterling crisis repeating itself. Other economists have dismissed this as hyperbole.<\/p>\n

Andrew Sentance, a former member of the Bank of England Monetary Policy Committee, wrote of \u201ceerie parallels\u201d between the position of the current chancellor and that of the late Denis Healey, the chancellor during the 1976 sterling crisis.<\/p>\n

But in an article for the Sun last month, Mr Sentance concluded: \u201cThe UK may not end up calling in the IMF.\u201d<\/p>\n

Governments borrow money from investors by selling bonds \u2013 which is a loan the government promises to pay back at the end of an agreed time. The yield on 30-year UK government bonds \u2013 which are known as gilts \u2013 has been rising for a number of months, although has now fallen back slightly.<\/p>\n

Badenoch said there was a \u201ccrisis\u201d in UK bond prices.<\/p>\n

She pointed to UK borrowing costs hitting a 27-year high last week as \u201cyet another indicator\u201d and stressed \u201cwe are not growing enough\u201d.<\/p>\n

The Tory leader said: \u201cLabour does not have any plan for growth,\u201d adding: \u201cThey thought that as soon as they got into power, things would just work because they\u2019re Labour and they believe in their own righteousness.<\/p>\n

\u201cThat is not working \u2013 they need to get a plan to grow our economy, otherwise we will end up going to the IMF cap in hand.\u201d<\/p>\n

Dismissing a suggestion she was talking the country down, she claimed that doing nothing \u201cwould be a dereliction of duty on my part\u201d and said was instead offering \u201can olive branch\u201d to the prime minister to work with him.<\/p>\n

\u201cIf we do get that sort of crisis because of their bad decisions, we\u2019re all going to suffer,\u201d she said.<\/p>\n

\u201cThere is no benefit for the opposition party in a country that\u2019s doing badly.<\/p>\n

\u201cWe want our country to do well and we will work with the national interest to get that.\u201d<\/p>\n

The Conservatives have two key demands for working with Sir Keir, which are maintaining the two child benefit cap and slashing welfare, although the Tories did not support the government when Sir Keir was forced to water down the welfare Bill by a backbench rebellion in July.<\/p>\n

\u201cI\u2019m sure that we\u2019ll be able to come up with some suggestions, and then if we agree to that \u2013 it\u2019s not a blank cheque \u2013 but if we can find some agreements, then yes, we\u2019ll support it,\u201d she said of the bill.<\/p>\n

Badenoch repeated her offer to work with Sir Keir on cutting the welfare bill in a speech in central London on Tuesday.<\/p>\n

She said the Labour backbenchers who blocked Sir Keir\u2019s welfare bill in July had not gone away, and claimed the prime minister \u201cneeds our help\u201d.<\/p>\n

\u201cWhy I\u2019m making this offer today is so we don\u2019t have a repeat of what we saw, where Labour backbench MPs held the prime minister to hostage,\u201d she added.<\/p>\n

A Labour Party source said Badenoch had a \u201cbrass neck\u201d for offering such advice, after the Conservative government had \u201ccrashed the economy\u201d.<\/p>\n<\/div>\n

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