IMF looks ahead
The global economy is recovering, but not fast enough for most people to notice the difference. Whether it's growth, inflation or government borrowing, that's the message from the IMF's latest World Economic Outlook. And nowhere more than in the UK.
For the advanced economies as a group, the IMF is now expecting a slightly slower recovery than it was in January, with growth of 1.2% in 2013 and 2.2% in 2014.
The UK forecast has been marked down more than most: to 0.7% growth in 2013 and 1.5% in 2014. It's the only country in the G20 to have the 2014 forecast revised down by more than 0.1%.
Overall, the forecast is not that much worse than it was in January. But with world stock markets up 15% since last summer, you might have expected the growth forecasts finally to be going up.
Unfortunately, the real economy is still quite a long way behind the financial markets, and the IMF doesn't seem to think it will catch up any time soon.
It says "financial conditions remain highly vulnerable to shifts in market sentiment, as evidenced by the renewed volatility in the wake of the inconclusive outcome of Italy's elections and recent events in Cyprus".
There is some good news on inflation - at least, if you're talking the kind of inflation that comes from rising commodity prices.
Though global commodity prices have risen 12% since last June, the Fund expects rising world supplies to bring down global energy prices by 3% in 2013. It also expects food prices to fall by 2%.
We had a taste of some of that today, with the price of Brent crude falling below $100 a barrel for the first time in ages. But the consensus among UK forecasters is that we will see inflation go higher than today's 2.8% - to more than 3% over the summer - before it finally comes back down.
Does the IMF think the Bank of England should worry about inflation staying higher for longer?
Hardly. In fact, like the Chancellor and the incoming Bank of England governor, Mark Carney, the Fund seems to think the Bank of England should be even more focused on supporting growth than it already is. (And, implicitly, even less concerned about above-target inflation).
And the chancellor himself? Any word from the IMF on whether he, too, should be easing up in his plans for squeezing the budget?
The answer is... the IMF seem to have put their UK fiscal advice-making machine on hold. The report merely repeats what it has said before - that "greater near-term flexibility in the path of fiscal adjustment should be considered in the light of lacklustre private demand". It does not say what, exactly, that kind of more flexible path would look like.
That allows the Treasury to claim the chancellor has already followed the Fund's advice, since the Fund now forecasts he will make slower progress cutting the structural deficit over the next few years than previously thought. Also, the pace of the tightening in the UK - at about 1% of GDP a year - is broadly in line with what the IMF recommends for advanced countries generally.
But it's the Treasury making those connections. Not the IMF. In today's press conference, the chief economist, Olivier Blanchard, said explicitly that the UK could consider a more moderate pace of fiscal tightening, beyond what the government had already done. But he didn't press home the point, or expand upon it. Apparently we will have to wait for the Fund's detailed annual report on the UK, in the summer, to get any more.
The report does have one other piece of bad news for the UK: it thinks our current account deficit is going to get even bigger. You'll remember I highlighted last year's terrible deficit, of 3.7% of GDP, when it came out. That was already one of the worst figures on record.
Now the Fund expects the gap between what we earn in the global economy, and what we spend to rise to 4.4% of GDP in 2013, and nearly that high in 2014 as well. That is the highest since 1989 and the second highest on record.
Only six months ago, the Fund thought Britain's current account deficit in 2013 would be "only" 2.7% of GDP. Clearly there is something going badly wrong with Britain's balance of payments which goes well beyond the slow pace of recovery in the eurozone - and has yet to be fully explained.
Whether it's rebalancing the economy or mending the budget, the broader lesson is that the chancellor is not fixing our problems nearly as fast as he hoped. And nor is the global recovery.