ALEX BRUMMER: It’s no surprise that the IMF has backed Reeves’ dismal budget; she was messing with its officials just last week and it’s dominated by an anti-Brexit cabal!

Rachel Reeves was in her element last week at the annual meeting of the International Monetary Fund in Washington.

As she patrolled the corridors of the IMF headquarters in a light blue pantsuit, I watched as she was regularly stopped by central bankers and financial officials from around the world, all eager to take selfies with Britain’s first female chancellor. Britain.

At one point, she even posed against a balustrade on the balcony overlooking the spacious great room as admirers, both men and women, took their photos.

None of her recent Tory predecessors, such as Jeremy Hunt or Philip Hammond, attracted anywhere near the same attention.

And away from the media, Reeves engaged in discreet economic diplomacy with US Treasury Secretary Janet Yellen – her role model – and insulted IMF Managing Director Kristalina Georgieva.

As one of the team accompanying the chancellor explained, she was ‘rolling the field’, reassuring relevant people about the tax rise measures that would be announced in this week’s Budget.

And yesterday it all paid off. In a rare intervention, an IMF spokesperson backed the Chancellor’s massive £40 billion tax burden, saying it would boost growth ‘sustainably’, and noting that the new fiscal rules showed the government was committed to reducing UK debt reduction in the longer term.

The unusually strong show of support from the IMF led the news bulletins on Radio 4’s flagship current affairs program Today, with the presenter announcing almost triumphantly: ‘The Chancellor Rachel Reeves has won the backing of the International Monetary Fund for yesterday’s Budget and the huge increases in spending and taxes. and borrowing.’

Not to be outdone, BBC economist editor Faisal Islam described it as ‘useful support for the Chancellor’.

Ms Reeves and Ms Yellen – her role model – at the International Monetary Fund’s annual meeting in Washington last week

Britain’s first female chancellor patrolled the corridors of the IMF headquarters in a light blue trouser suit

As the economic enforcer of the global financial system, the IMF normally strives to be carefully independent when it comes to domestic politics, so its comments amounted to an outrageous breach of convention.

And such cheerleading was in stark contrast to the dismal assessment from the independent Institute for Fiscal Studies and the unconvincing support from the Office for Budget Responsibility.

The money markets were also unimpressed. In the months since Sir Keir Starmer took office, the price of British government bonds, or gilt-edged shares, has fallen precipitously and the interest charged on them rose to 4.43 percent last night – an all-time high in recent years. G7 club of rich western countries.

What is worrying is that bond yields are now at a similar level to that of the ‘Truss tantrum’ of two years ago.

The collapse of confidence in the pound and British government bonds, which forced the resignation of Liz Truss as Prime Minister after just 49 days, was in no small part the result of the dressing down that Mrs Yellen and IMF officials gave to the then Chancellor Kwasi Kwarteng handed out.

The contrast between the IMF’s devastating approach to Truss and the lavish praise for Reeves’ Budget could not be sharper. It raises serious questions about the integrity and neutrality of the Washington-based institution.

Historically, the IMF has had a reputation for imposing strict fiscal discipline on its members. In 1976 it forced Jim Callaghan’s Labor government to make humiliating cuts to public spending, tighter monetary policy and higher interest rates in return for a loan.

But the normal strictures about budget deficits, borrowing and debt have been completely ignored when it comes to the latest Labor budget.

This may be because the IMF has become increasingly dominated by a European cabal that appears to harbor long-standing hostility against Britain – or at least the Tory party – for daring to leave the European Union.

Christine Lagarde, the French director of the IMF at the time of the 2016 EU referendum, claimed that Brexit would be “fairly bad, to very bad” for Britain.

Meanwhile, the current managing director, Bulgarian-born economist Georgieva, was previously vice-president of the EU, and most of the IMF’s top officials are from the continent.

The strength of the Brussels-leaning contingent in the Fund’s upper echelons tends to shield stumbling European economies from the kind of direct interference that Britain is suffering.

Reeves must be happy to have received the IMF’s imprimatur for her first budget. But the surprise intervention has failed to reassure troubled bond markets, calm businesses or assuage the skepticism of Britain’s homegrown watchdogs.