It is, in many ways, a quiet news morning, given that I am not willing to repeat myself too often, and much of the news agenda is playing on repeat today.
However, this stood out to me on Twitter when I was posting this morning's video:
The Telegraph is claiming that as the UK heads for a supposed £3 trillion of so-called national debt, an IMF bailout is imminent.
This, of course, is total nonsense. The UK only has debt denominated in sterling, and can always create the sterling that is required to make settlement, and therefore there is no chance at all of the UK requiring a bailout from anyone, let alone the IMF.
In addition, since the UK has substantial foreign currency reserves, it is not at risk in any other sense either.
So what is the Telegraph doing with this story? It is, of course, scaremongering, as is the usual habit of far-right media. And what is its aim? It is to suggest that the scale of UK government spending on those things that the Telegraph seems to find thoroughly undesirable, like help for those in need, should be scaled back whilst, simultaneously, defence spending should be increased. Unless, apparently, we do as it demands, we will go bust, although this is a technical impossibility.
We are living in a world of gross misinformation, prejudice, and barely disguised agendas of hate, and that is as true of economics as it is of any other part of life. The Telegraph both hates what government can do, while simultaneously demanding that it deliver what the Telegraph expects. The hypocrisy implicit in the Telegraph's paranoia should be clear for all to see.
And what we should be pointing out is that:
- The UK cannot default, because it can always pay its debts, as it creates the only means available to let that happen.
- The debts in question do not fund government spending, because government spending is funded by the Bank of England.
- The debts in question are fundamental to the operation of British pension funds, life assurance companies, and UK banks, none of whom can survive without them, so why is the Telegraph so adamant that they must be repaid?
- If we reduce UK government debt, that will require increased levels of private debt to replace the gilts in question, and when private debt is very much more vulnerable to default, why does the Telegraph want that?
- Why doesn't the Telegraph understand how government funding works after all the years it has been in operation?
- Why is the Telegraph intent on supplying misinformation?
It is the case that a great deal of what supposedly passes for news in much of the right-wing media is, these days, nothing but a pile of nonsense, but that is most especially true when it comes to economic commentary in the Daily Telegraph.
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Rolling out the old IMF bail out trope is sadly very predictable. It does resonate with the public – at least those old enough to remember the 1976 debacle. It’s difficult to find accurate information about exactly what happened. A post on the blog or a “Richard Murphy on” would be extremely helpful.
I have drafted a video
Cabinet minutes are available on the national archives website. Only need to search IMF. There is even a special webpage devoted to the IMF crisis of 1976 with all relevant government documents. The Labour government had a clear plan for an alternative to the IMF road. It is clear that the IMF loan was intended to prop up the value of the sterling exchange rate rather than ‘pay for government’ spending.
Thanks
Got a link?
Echos of Callaghan & Healy’s lies about IMF bailouts, which were used to contain the Labour left back in the 1970s.
https://stephaniekelton.substack.com/p/can-it-1976-happen-again
Maybe Polly Toynbee can help. She’s full of bright economic ideas.
Here’s her latest (sit down out of reach of sharp objects before reading) – young people under 40, can get extra cash now by delaying their pension age by a year. (No, it isn’t April Fool’ day, it just feels like it).
https://www.theguardian.com/commentisfree/2026/jun/09/young-people-money-citizens-advance-generations-older-people
What tangled webs people weave, because of their obsession with preserving the household analogy.
From the ‘Social Market Foundation’ – neoliberal to their core, as I know.
My their own statement they’ve been saying this for years now. With statements that have implied it would be imminent.
How that hasn’t translated to thinking they might have been wrong is the question.
They’re like the raving zealots standing outside with a placard reading ‘The end is nigh’, who have a date they’ll give that magically moves to another date when the first one passes.
Rapture-graph. The rest of us can plan for the world not ending when they claim it will.
A person on YouTube covered this, but focusing a bit more on why the Telegraph would promote such misinformation. It’s a propaganda rag for hire.
https://youtu.be/XWmzyya6AVE?si=_K8toMrW54YvDbL9
https://www.theguardian.com/media/2026/jun/09/uk-regulator-ofcom-social-media-firms-adopt-measures-stop-viral-illegal-content
Anybody fancy contacting ofcom & complaining about “viral illegal content” – into which category I would insert the Torygraph article.
(If they believe what they wrote then they are too stupid to write for a “newspaper” or, they don’t in which case it is fiction, not news and needs to be classified as such).
Other question: “once the tories are extinct” (coming to a cinema near you soon) .. what do we call the Torygraph? Thickograph?
I tried to complain to the press Complaints Commission at the time in 1999 about the Telegraph. In my view they were spreading hate speech although it wasn’t called that at the time and i was horrified. Still bothers me now. Anyway I was told by a posh voice at the other end of the phone that they were off to a party so could I maybe call again another day?
Why do the right wing media play these games?
Well, there is history.
Labour in 1976 went to the IMF for a bailout, so it is very easy for neoliberal/right wing economists, and journalists, to jump to a similar — very wrong — conclusion now. It is also propaganda to frighten people. The whole neoliberal agenda is based on lies and misleading people into believing TINA. What better way of reminding people that Labour, “have form” when it comes to dealing with crises like now.
But, it is also a Labour government that does play by neoliberal rules. In 1976, the bailout came with conditions of massive public spending cuts. While full on neoliberalism didn’t arrive until the 1980s, it was born out of the 1970s. The Labour government carried out the instructions of the IMF, which was basically neoliberal. That only worsened the quality of life for those that needed help the most — the very people that the Labour Party supposedly exists to protect.
I’m tempted to say, same old, same old…
Of course, you are right, Labour don’t need to do it now, but it would help if they played by different rules.
But the bail out was not needed
Why? Because we were a soveeign money issuer – although we did have dollar debts t0 the US back then.
“We did have dollar debts to the US back then”.
Luckily for the U.K. the most important and valuable resource in history was found in Scottish territory. In abundance too. What luck!! A resource that was only ever traded in US dollars too. More great fortune!!
The government paid off our dollar debts, didn’t go to the IMF, invested heavily in the U.K., sold no assets off to vampires, and everyone lived happily ever after. THE END.
🙂
as I understand it, the IMF exists to help fund international trade, not subsidise domestic spending. The quadrupling of the oil prices increased the demand for dollars ( in which oil was traded) I assumed that was the main reason.
A few years ago you wrote, as I recall, that old habits died hard and in the Bretton Woods the Bank would buy pounds to keep up the exchange rate. It wasn’t necessary in the post Bretton Woods environment.
I read Dennis Healey’s book ( he was Chancellor ) and in it he claimed he made a mistake by following the advice of his civil servants.
It seems not all the money from the IMF was used and was repaid by 1979. No that that stops the old line;Labour made such a mess, they had to go, cap in hand, to the IMF.’
It tuned out no help was ever really required
Where’s the famous “cap in hand”?
Do they keep it in a glass case at the Treasury? Does it have any pennies left in it? Did Dennis Healey take it home with him? Did the IMF demand to keep it? If we need money, could we auction the cap to a collector? Whose cap was it anyway? How much IMF cash can you fit in a cap anyway? Whose kitchen table did they balance books on?
I maintain that my questions are just as credible as those posed by the joke economics of Axel Springer’s Daily Telegraph.
🙂
Labour went to the IMF for a bailout it didn’t need. It was an excuse for public spending cuts. Spending cuts were unpopular and many could see they weren’t needed. So Labour became unpopular. People voted for someone, Thatcher, who they thought was on their side. How wrong they were. Much like voting for Trump. And, nearly 50 years later, here we are.
Might the absence of the teaching of questioning, coherent, wide-spectrum socio-economics in primary and secondary education and the narrowness of its teaching in tertiary education contribute to the size of the readership of the Daily Telegraph?
🙂
In the North of Ireland there is a textbook called Your Money Matters . Why we pay income tax is explained.
We’re told that income tax is the biggest source of income for the government and accounts for nearly 25% of government income . This together with the income the government raises from other sources is used to pay for government spending .
The book is geared for 15/16 year old pupils studying for GCSE’s in Learning for Life and Work .
Jesus wept .
True
He would
It’s absurd that the IMF loan in 1976 should loom so large in the country’s collective economic memory.
In 1976 the gold standard (for the USD) was recent history and the fixed exchange regime for GBP was still operating. Defending FX rates was in the DNA. As it turned out, the trigger for the run on GBP that prompted the loan was based on dodgy trade data…. but that was discovered later.
Today is different. We have learned the dangers of ‘line in the sand’ FX defence… it’s unnecessary and futile. Sure, a GBP collapse would be a problem but it’s just not happening…. and there is no sign of it.
One thing is for sure – there is no (and will be no) debt crisis. Could there be an FX crisis? Well, never say never.
Thank you
When the government can find £174m ‘just like that’, one wonders why people don’t ask how.
Ah – but that £174 million has been lobbied for by the road lobby who oversaw the destruction of rail and bus services (the competition).
We live in a well established scheme of lies perpetuated to ensure that only the wealthiest get their hands on society’s money.
That is all I can say about the spectre of the IMF.
“economists warn”..
which ones? How much were they paid? Are they giving red-light districts a bad reputation?
cue assorted right whinge UK serfs frothing at the mouth over breakfast.
In the case of the bailout, we are in cybernetics territory, bailout – conditions – bit of austerity – bin-men strike – Thatcher.
Begs the question: who was advising sailor Jim and Healey in ’76? In fairness (why?) their mind set was still probably on the $-linked to gold of post WW2 and “runs on the pound” (engineered by the USA to get the UK into Vietnam). The WW2 generation were certainly past it by the mid-1970s.
Rogoff – unbelievably
Sound like a dish has lost its Stan (think about it)…….St rog an off.
Sorry about that – things are so bloody dire one has to have a laugh
I assume this is the piece that appeared on the front page of the Telegraph a few days ago quoting Kenneth Rogoff. The same Kenneth Rogoff who co-authored (with Carmen Reinhart) ‘Growth in a time of debt’ (2010) which suggested that “for levels of external debt in excess of 90%” GDP growth was “roughly cut in half”, giving support to the implementation of austerity measures in the aftermath of the 2008 financial crisis. The paper was subsequently found to contain coding errors and methodological issues that refuted their conclusions.
I rhnk it is…but they keep on pushing it
The concentration of media ownership in the UK is terrifying .It applies to both the legacy media and the digital media – Google /Meta/X.<p>
Ownership seems to be mainly based overseas -. The German Axel Springer now owns the Telegraph . It used to be conservative with a small c but now seems to be rabidly far right.<p>
If there is nowhere for people to get proper information – how will we ever become a democracy?<p>
There is only one message – ‘there is no money’.<p>
‘That is all you know on earth and all you need to know’
If the Telegraph is so determined to cut UK spending and debt, maybe they can find a buyer for two slightly used, almost entirely pointless, aircraft carriers? They look big, don’t have enough aircraft, and are generally broken. They also cost an absolute fortune to keep running. I’m sure someone out there is dumb enough to buy them. Would look great with Saudi flags on them… just call them yachts with a really large helipad…
Democracy has failed. There are just too many carve-outs for the extremely wealthy and the institutions that support them. Led by what is happening in the US, we are transitioning to full-on oligarchy and this noise about the IMF is incidental music. Unless ……….?????
I’m sorry but calling the Telegraph “far right” does nothing except make you look childish and ridiculous, at which point a huge majority of people will completely ignore anything you may write, accurate and valuable as it might be. Just call them right wing.
‘Far-right’ is in the eye of the beholder. Farage has, I think, denied he’s far-right, as has Restore Britain (who probably think the Telegraph is at best a pinko rag). Starmer has described himself as a socialist. I’m not sure which of these is the most absurd.
Since those most likely to object to the label are Telegraph readers themselves, it’s a fair bet most of them will ignore the message anyway, no matter which adjective is considered grown-up. Whether or not they throw their dummies out of the pram is irrelevant. The majority of non-Telegraph followers are unlikely to see the label as the takeaway message from all this.
Thank you
The idea that labels like far right (or far left, or extremist or fascist) require the consent or approval of those being labelled, seems rather odd to me.
It seems an objective way of describing a once quality old fashioned Conservative newspaper whose stance has shifted to the right for many years, and since being purchased by Axel Springer, is, objectively, FAR right. He made it quite clear what he would be doing, and many staff either left or were sacked. When a paper moves further right, from an already right-wing position, what else can you call it?
It feels to me as though there is a converted effort to take Britain back to Victorian times where the labouring classes knew their place, expected very little and the squires rules the roost.
It is happening everywhere in all walks of life, with us having to get used to at least a decade of cart track roads, being dissuaded from having our own transport, losing the right to universal healthcare, being forced to care for the elderly in our homes, having a right wing education forced on children, not expecting the right to travel abroad etc etc.
Until recently this kind of thinking was said to be conspiracy theory but increasingly it seems to be true.
I do wonder if Richard should do a video on media ownership in the UK and how it works for them, not us.
Good interview on sky this morning with Mehdi Hasan has launched his news platform, Zeteo, in the UK, targeting audiences he says are increasingly dissatisfied with both British politics and the mainstream media.
Who is doing economics for him?
It seems like Grace “I’m a Marxist” Blakeley. That’s going to go well. Just what the UK’s alternative media wants.