The Tories have averted economic disaster – but can they stay the course?

This is the time of year when the UK downs champagne by the bucketload.

The season is upon us, beginning with the Chelsea Flower Show, leading to the Derby, Wimbledon, Glyndebourne, Royal Ascot, Henley. In the mix, too, are festivals galore. And the weather is improving at last. Raised glasses all round!

Now, thanks to the IMF, the cause for celebration is suddenly doubly strong. According to the fund, the UK economy has turned a corner. The country is not expected to suffer a recession this year, nor will it have the weakest economic growth in the G7 group of leading industrialised economies. A predicted 0.7 per cent contraction has been replaced by 0.4 per cent growth. Compare that as well with Germany, on course for “near-zero” growth.

What’s more, the Bank of England is declaring that inflation is also heading downwards.

Forget the fizz, make that a treble! It’s true there is much to cheer. But at the risk of being Eeyore: not yet Pooh, not yet.

While Conservative politicians will rush to hail the news as momentous, proof that theirs is the party that can be trusted with our money, what is really happening is that stability has returned after the upheaval wrought by the former prime minister Liz Truss and her chancellor Kwasi Kwarteng.

Carry on in the same manner that they did and the UK would be dead and buried. Fortunately, under Rishi Sunak and his chancellor, Jeremy Hunt, sense has prevailed. The brakes have been applied, and disaster has been avoided.

That’s no bad feat in the midst of a global energy and cost-of-living crisis, supply chain issues and a war still raging in Europe. But what the IMF announcement really indicates is that the levers used to engender calm still very much apply; Sunak and Hunt must not relax the pressure, not for the foreseeable future. To do so would be calamitous.

That means the UK consumer must continue to bear the brunt of their ratcheting-down policy. Public spending has to remain fiercely tight; taxes should stay high; interest rates cannot come down. These deadening features, designed to slow spending and curb inflation, must stay.

Sunak and Hunt have also been helped by the relaxing of world energy prices. Without that, things would be far worse. As the Northern hemisphere moves into summer, demand for heating eases. Woe betide the economy, however, if next winter we have not taken sufficient measures to balance the embargoed supplies from Russia. Then, that degree of comfort from a falling cost of energy will be absent.

Any temptation on Sunak and Hunt’s part to cut taxes must be resisted. That’s easier said than done when your backbenchers are champing at the bit for the implementation of what they regard as a key, winning part of Tory dogma. There is a general election looming. They want to put clear blue water between themselves and a resurgent Labour and Liberal Democrats. Rocked by the recent poor local election results, they are desperate for something positive to wave in front of the electorate.

Likewise, Sunak and Hunt cannot afford to free public spending. Again, that’s not so easy when public sector workers are also clamouring for pay rises and striking. They’re forced to weigh up the unpopularity caused by refusing to submit to increased wage demands and the resulting disruption caused by industrial action, versus the unpopularity caused by presiding over an economy that is not getting to grips with inflation and is perceived abroad as out of control.

A corner of sorts has been turned, albeit slowly. Any thought of accelerating must be abandoned. That same, plodding progress has to be maintained, in order to get completely round the corner and on to a straighter path. We could so easily slip back, which is what the IMF is saying.

For that reason, Sunak and Hunt must keep their champagne on hold. By all means, they can savour the moment – things are a lot better and more promising than they were – but they’ve no cause to go mad. They should, at all costs, ignore the voices within their own party and the media, and stick to what they’re doing. It’s working. The IMF – no pushover – says so.