Has the IMF pulled the rug out from under David Cameron?

In the not-very-funny economics joke, the IMF stands for “it’s mostly fiscal”.

That’s a reference to its long-held ideology of forcing developing countries to cut spending and budget deficits in response to almost any financial crisis. It was a sort of cosmic chastity belt on fiscal profligacy.

So what better ally for the prospective iron prime minister David Cameron, and his plan for an “emergency budget” to deal with Britain’s “debt crisis”?

Well, incredibly, I would argue, Dominique Strauss-Kahn appears to have pulled the rug from underneath David Cameron.

Just an hour before a political beauty parade of party leaders up before Britain’s business elite, the IMF chief appeared to come down firmly on the side of the Prime minister’s slower approach to dealing with the deficit. He said that withdrawing fiscal stimulus prematurely risked a double dip recession.

Of the UK specifically he said that the private sector economy is still not normal enough for withdrawal of fiscal stimulus and will have to last “some time more”.

For good measure he also markedly softened his naked opposition, expressed into our cameras at the G20 meeting in St Andrews, to Brown’s proposal for a serious look at a financial transactions tax that looks a little bit like the Tobin Tax.

All proposals are on the table and will be studied, he said, which wasn’t suggested only a fortnight ago.