Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Lagarde Says IMF ‘Got It Wrong’ on Rallying U.K. Economy

International Monetary Fund  Managing Director Christine Lagarde. Photographer: Chris Ratcliffe/Bloomberg
International Monetary Fund Managing Director Christine Lagarde. Photographer: Chris Ratcliffe/Bloomberg

June 9 (Bloomberg) -- The International Monetary Fund underestimated the strength of the U.K. economy when warning against the government’s austerity program, Managing Director Christine Lagarde said.

“We got it wrong,” Lagarde told the “Andrew Marr Show” on BBC Television yesterday. “We acknowledged it. Clearly the confidence building that has resulted from the economic policies adopted by the government has surprised many of us.”

A year after the IMF’s chief economist, Oliver Blanchard, said U.K. budget cutting risked “playing with fire,” the Washington-based lender said in April the U.K. economy will grow 2.9 percent this year, the fastest pace among the Group of Seven nations.

Pressed by Marr on whether she had apologized to Chancellor of the Exchequer George Osborne, Lagarde stopped short of saying so and said “Do I have to go on my knees?”

“We said very clearly that we had underestimated growth for the U.K. and that our forecasts had been proven wrong by the reality of economic developments,” she said.

Lagarde said the U.K. economic outlook was now “more sustainable” as investment joins consumption as an engine. She reiterated the strength of the U.K. housing market remains a threat although she said its rise was “multi-faceted” rather than an outright boom.

Distancing herself from a European Commission call for higher taxes in the U.K., Lagarde said the IMF doesn’t “see a massive increase in tax as recommendable.”

Lagarde, a former finance minister of France, again sought to play down the chance she will become president of the commission without ruling out the chance completely.

“I have a job,” she said. “I’m not a candidate to any other position.”

To contact the reporter on this story: Simon Kennedy in London at skennedy4@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net Eddie Buckle, Andrew Atkinson

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.