Outlook: Britain is IMF's blue-eyed boy

It is always nice to be patted on the back for economic achievement, so those British newspapers that chose to break the embargo on the IMF's world economic report yesterday can hardly be blamed for highlighting the glowing terms in which it describes Britain's economy and prospects and the unfavourable gloss it puts on those of our main Continental partners. Had we too chosen not to respect the embargo on publication, we probably would have done the same thing.

The point ought to be made, however, that the IMF is hardly an unbiased observer of these things. The International Monetary Fund is not, as might reasonably be supposed, just some kind of worldwide benevolent fund always willing to lend a hand to those countries that get themselves into difficulties. Its real purpose is essentially that of foisting the American model and way of doing things on the rest of the world, which it does with considerable success in time-honoured way - extracting root and branch reform out of the despair of economic crisis.

It is hardly surprising, therefore, that the IMF should see in Britain the blue-eyed boy of Europe. With its deregulated labour and capital markets, Britain is the country that most closely accords in Europe with the American model. By contrast, other previously much more successful economies seem stuck in a bygone age. Modernise or die, the IMF shouts, Tony Blair-like, and though most of the rest of Europe still rather regards America's attempts to sell its ways as tantamount to the export of toxic waste, it gets an increasingly receptive hearing. Everyone believes in flexible labour markets, fiscal responsibility and free capital markets now, even if they don't practice any of these things.

It is almost exactly 21 years ago that the IMF came to the rescue of our own dear country and it is perhaps possible to see in the price it extracted the roots of Britain's present economic renaissance. Certainly the humiliation of the sterling crisis of 1976 helped undermine the credibility of the Labour administration and pave the way for the economic reforms of the 1980s. And now here we are basking in the glow of an economic assessment that paints us in a more favourable light than Germany and Japan. But let's not get too carried away here. There's one country that gets an even better write-up than us - the United States of America. Surprise, surprise.