IMF: UK faces £200bn bank bailout cost… or does it?

UPDATE: The IMF retracted its claim.

ORIGINAL POST: The IMF has hugely upgraded its projection for the likely total costs of the bank bailout.

In today’s Global Financial Stability Report the costs of financial stabilisation are put at a whopping 13.4 per cent of GDP, or £200bn. This brings the IMF in to line with the estimates from the experts in our special investigation last month.

It is an absolutely massive number, arising principally from the toxic asset insurance scheme.

And on the eve of a budget when we are told the kitty is empty for further stimulus to the economy, it raises all sorts of questions about how much money is being diverted to the financial sector.