Everyone's agreed Britain's finances are in a mess. "One change is now inevitable", says Camilla Cavendish in The Times. "We're moving into the era of no-money politics." That'd be a tough message even for a strong government which is just what we don't have to sell to the British public. Worse still, as Bank of England governor Mervyn King has reportedly put it, the scale of the cuts in store will ensure that "austerity Britain will hate its government".
So "why not turn to the big boys at the IMF to lay out a plan that government can then present as the Authorised Version"? asks Cavendish. "The IMF cannot be accused of being partisan. Its verdict on Britain would really make people sit up and would strengthen the hand of any politician brave enough to take the right decisions. And it might be good for the IMF to know the worst, just in case."
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Bob Janjuah at RBS agrees that "the reason for calling on the IMF is for an audit, not for money. [A new UK government] can 'kitchen sink' everything from the start and blame it all on Gordon Brown." But Janjuah also points out the need for haste. "Britain's debt metrics are pretty ugly when you include private finance initiatives they have off the books. We think the real figure is over 100% of GDP al-ready."
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That's scary. Some pundits suggest the UK isn't in immediate danger because of its benign debt pro-file. With the maturity of its existing debt the longest in the OECD, and the short-term rollover re-quirement the percentage of all outstanding debt due to be issued this year the lowest, we should be safe for now. Yet the Treasury will still have to sell vast amounts of new gilts over the next 12 months, raising £187bn in new debt by 5 April 2011. So we don't have much breathing space.
Hence Cameron's first decision should be to pick up the phone. "We're back in 1976, the last time the IMF had to bail Britain", says Niall Ferguson in The Spectator. "We need to initiate talks it's much bet-ter to act sooner than later."
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