Brexiteer Ben Habib has branded the IMF an EU stooge

IMF chief warns the economic horizon has 'darkened'

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Attempts by the International Monetary Fund (IMF) to persuade Prime Minister Liz Truss to rethink the decision to scrap the top rate of income tax amount to “blatant political meddling“, a prominent Brexiteer has claimed. Former Brexit Party MEP Ben Habib also accused the IMF of being an “a stooge for the EU” hellbent on undermining Ms Truss after its extremely rare intervention – which he admitted left him “gobsmacked”.

In a statement issued yesterday after Chancellor Kwasi Kwarteng’s min-budget, the Washington DC-based organisation said it was “closely monitoring recent economic developments in the UK and are engaged with the authorities”.

It said Mr Kwarteng’s scheduled announcement in November, when he will offer his new “fiscal plan”, would “present an early opportunity for the UK Government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners”.

Mr Kwarteng’s controversial decision to scrap the 45 percent rate of income tax paid by people earning more than £150,000 a year has prompted significant criticism – but Mr Habib, also chief executive of property investment company First Property Group, suggested the financial hit to the UK economy amounted to a “rounding error”.

The IMF is a stooge for the EU

Ben Habib

Mr Habib told “It is blatant political meddling. The IMF is a stooge for the EU – it fears Truss and is seeking to undermine her premiership.

“The cut to the top rate of income tax from 45 percent to 40 percent may have been politically naive but was neither here nor there in the overall scheme of things.

“Its cost will be some £2billion a year. That is dwarfed by the potential cost of £150billion to cap fuel bills.

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“So I was gobsmacked to see the IMF take our government to task over that cut.

“It did not challenge the government’s overall economic approach; it focused in only on the higher rate of tax.

“Their intervention was entirely political, not economic.”

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So established has the orthodoxy of state borrowing and spending become that “putting power back into the pockets of the people offends them”, Mr Habib said.

He added: “The biggest government spending commitment in history, capping fuel bills, went by without comment. They homed in on one of the smaller costs of the mini-budget.

A “cornerstone of democracy” was allowing people to decide how they spent their own money, Mr Habib emphasised.

He said: “The IMF, like the EU and so many other supranational institutions, holds that principle in contempt. They do not trust people to make the right decisions. They think they know better.

“They are wrong. If we are to break from 12 years of economic malaise we must cut taxes; we must deregulate. We must strip power away from institutions and put self-determination back in the hands of the people.

“In 2016, the IMF warned of catastrophe if we voted for Brexit. They were wrong. They are wrong again.”

The Bank of England today launched an emergency UK Government bond-buying programme in a bid to prevent borrowing costs from spiralling out of control and stave off a “material risk to UK financial stability”.

The Bank announced it was stepping in to buy government bonds – known as gilts – at an “urgent pace” after concerns about the Government’s economic policies sent the pound tumbling and sparked a sell-off in the gilts market.

The move, in direct response to the Government’s tax-cutting strategy, will pile further pressure on Ms Truss and Mr Kwarteng to defend a vision for the economy which has spooked markets and shocked many mainstream economists.

While the pound hit an all-time record low of 1.03 against the US dollar on Monday, the yield on 10-year gilts – a proxy for the effective interest rate on public borrowing – has also soared by the most in a five-day period since 1976, according to experts.

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