Four reasons why the economy will offer Burnham an unexpected boost

Andy Burnham will become Prime Minister on Monday against the third-strongest economic backdrop of any of his predecessors in the past 50 years, according to analysis. Only Tony Blair and Theresa May came to power with the economy in a better state, the study by Public First and the Prosperity Alliance found. It measured Burnham’s first-year forecasts against the actual first-year record of his 13 predecessors, across growth, inflation, unemployment, and borrowing. Scott Corfe, economist at Public First, said this backdrop would “give a Burnham government more room for manoeuvre than many of its predecessors”. Inflation set to ease Inflation – the rate at which prices increase – is running at 2.8 per cent, according to the latest official figures. That is far below the 11 per cent peak seen in 2022, but still slightly above the Bank of England’s target of 2 per cent. However, the central forecast used in the analysis predicted that, in Burnham’s first year in office, inflation is set to fall to meet that target. That matches the rate recorded under Blair and ranks Burnham second out of 13 Prime Ministers. Only Boris Johnson – whose first year coincided with pandemic lockdowns pushing inflation to 1.0 per cent – saw a lower rate, while Harold Wilson and Margaret Thatcher both inherited double-digit inflation in the 1970s and 80s. Unemployment on track to fall Unemployment, which stands at 4.9 per cent, is set to fall by 0.5 percentage points in Burnham’s first year. That continues the recent trend, which has seen the unemployment rate fall for two consecutive quarters from a recent peak of 5.2 per cent at the end of last year. On this metric, Burnham comes third out of his 13 predecessors, with only Blair and May seeing lower unemployment in their first year. But Burnham faces a separate challenge – a record 1.1 million young people aged 16 to 24 are not in education, employment or training, according to the Office for National Statistics, the first time the figure has passed a million since 2013. Borrowing headroom to improve Public sector net borrowing – the gap between what the Government spends and what it raises in tax – is forecast to shrink by 0.7 percentage points of GDP during Burnham’s first year in office. That forecast improvement ranks Burnham fifth out of 13 Prime Ministers on this measure, ahead of the position Sir Keir Starmer inherited. Burnham has said his agenda will be “backed with sound public finances” and that he will stick to Rachel Reeves’s fiscal rules. These require tax receipts to cover day-to-day spending and for debt to be falling as a share of the economy, meaning the Government can only borrow to fund investment. Growth modest, but still positive GDP growth – the rate at which the economy expands each year – is forecast to reach 1.6 per cent in Burnham’s first year in office. The economy grew 1.3 per cent in 2025, with the OBR forecasting a slowdown to 1.1 per cent this year. That places Burnham fifth out of 13 prime ministers on this measure, behind the stronger first-year expansions recorded under Blair, May and James Callaghan, but ahead of the recessions inherited by Johnson and Thatcher. Corfe said “the economy would be growing” over the next year, but cautioned that “this would be a story of stabilisation rather than boom”. “Growth would remain lacklustre, real wage gains limited, and public confidence in the economy exceptionally weak,” he added.