Days after the England football manager was criticised for a lack of adventure and imagination, Britain is about to get a new prime minister who can hardly afford to be any more daring.
Economists say Andy Burnham walks into a tricky situation, with precious little fiscal headroom and where mistakes could quickly prove costly.
The latest GDP figures underlined the scale of the challenge. The economy grew by just 0.1 per cent in May – an improvement on April's contraction, but hardly the sign of a country powering ahead.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, described the figures as a “dishearteningly weak rebound” that “is unlikely to ease anxiety over the UK's economic health”. He warned the latest data highlighted “the UK's vulnerability” to renewed geopolitical tensions, with higher oil prices threatening to fuel inflation and further erode the incoming prime minister's room for manoeuvre.
So what exactly does Mr Burnham inherit, where are the biggest risks, and where are the opportunities?
What is Burnham's economic inheritance?
The verdict from economists is broadly the same: modest growth, poor confidence and very little room for error.
Andrew Prosser, head of investments at InvestEngine, says Mr Burnham inherits “the fragile state of the UK economy and the public finances”.
While the economy expanded by 0.6 per cent in the first quarter, Mr Prosser points to weak household finances and stagnant living standards. “Burnham's challenge will be to turn headline economic growth into improvements in productivity, wages and living standards that people can actually feel.”
The outlook has become more complicated following renewed conflict in the Gulf. Higher energy prices threaten to push inflation back up, leaving the Bank of England cautious over cutting interest rates while squeezing household budgets.
Simon French, chief economist at Panmure Liberum, is less convinced the new prime minister is inheriting anything dramatically different from his predecessor. “Largely the same as Keir's,” he says. “On the main economic data it is largely as you were under the Tories.”
Others see hidden economic potential. Dr Carole Easton, chief executive of the Centre for Ageing Better, argues Mr Burnham inherits “huge amounts of untapped potential of older workers"” Employment rates among over-50s remain significantly below younger age groups and, she says, closing that gap could boost the economy by £130bn while adding £15bn a year to Treasury revenues.
What is his biggest threat?
If there is one issue almost every economist identifies, it is maintaining market confidence.
Mr Prosser argues “the biggest threat to Mr Burnham's government will be political instability”. Markets, he says, can cope with a change of prime minister, “but they respond much less favourably when they believe a government's plans are unfunded or likely to increase inflation”.
With debt standing at around 95 per cent of GDP and borrowing already above official forecasts, “the government has little room for error”, he warns.
Samuel Fuller, director of Financial Markets Online, believes the real danger lies in the bond markets. “Perhaps the biggest danger awaiting him is the bond markets,” he says, noting that Britain's debt interest bill now exceeds the education budget. Should investors lose confidence, they “could increase interest rates still further, crushing the Burnham Government just as they did Liz Truss following her chaotic mini-Budget”.
Inflation remains another major concern. French identifies it as Mr Burnham's biggest economic threat, whether it comes from “the Gulf, public sector pay, or just an ongoing poor supply side”.
Oxford Economics' Michael Saunders expects Mr Burnham to avoid taking unnecessary risks. “Major fiscal loosening would be a high-risk strategy,” he says, arguing that any new prime minister who fails to show “a clear early commitment to fiscal sustainability risks a destabilising rise in bond yields”.
His biggest opportunity?
The opportunities are harder to spot than the risks, but economists believe Mr Burnham has the chance to improve Britain's long-term growth if he focuses on structural reform rather than headline-grabbing spending.
Mr French argues Mr Burnham could genuinely become “a supply sider who generates higher growth” if he pursued “a Property Tax reset and a Brexit reset”.
Mr Prosser believes Mr Burnham's ambitions on devolution and public service reform could reshape the economy, but only if he first reassures investors. “He will only get the opportunity to undertake his reforming agenda if he can reassure markets that his plans are sound and fiscally credible,” he says.
Dr Easton believes Mr Burnham's years as mayor of Greater Manchester could offer a blueprint for national government. His biggest opportunity, she says, is “to use what has worked well from his time leading Manchester and deliver it on a national scale”.
She argues Greater Manchester's place-based approach has shown that housing, transport, employment and health are often better tackled locally than through “one size fits all” national policymaking.
Business leaders also see retail as an opportunity. Helen Dickinson, chief executive of the British Retail Consortium, says: “Retail is where the economy shows up in everyday life.” With the right reforms, she argues, the sector can “drive investment, support jobs in every postcode, and keep household essentials affordable”.
What should he do right away?
Most economists believe Mr Burnham's first task is to reassure markets that little is about to change.
French's advice is simple: “Sell the UK as a great place. Ignore Kemi [Badenoch], ignore Nigel [Farage], ignore Zack [Polanski] and just speak over them.” He also believes Mr Burnham should “hold a budget early, rather than leaving it to the end of the year”.
Mr Prosser wants the new prime minister to look again at planned reforms to ISAs before they are implemented. He argues the proposals risk making the savings system more complex while discouraging investment. “If the government wants more people to invest, it should focus on education, confidence and simplicity, rather than making ISAs harder to understand and less predictably tax-free.”
Dr Easton has another immediate priority. Having backed the idea as mayor of Greater Manchester, she believes Mr Burnham should establish a Commissioner for Older People and Ageing in England. Such a role, she says, would ensure government has “a much more strategic focus to address the challenges and opportunities of our ageing population”.
Meanwhile, retailers want swift action on employment costs, business rates, planning and energy prices to unlock investment.
One thing he should not touch?
If there is one consistent warning, it is not to unsettle investors.
Mr Prosser says Mr Burnham “should avoid rushed or poorly signalled changes to the taxation of investment”. Sudden increases in Capital Gains Tax, he argues, could prompt investors to sell assets before changes take effect and undermine long-term investment.
"Any new taxes," he adds, "should not remove the incentive to invest but help strengthen private sector investment and improve returns for savers in the long term."
Mr Saunders offers a broader warning. Since the fallout from Liz Truss's mini-Budget, he argues, Britain remains “on probation in fiscal policy terms”. Mr Burnham's challenge is therefore not simply to grow the economy, but to convince financial markets he can do so without jeopardising the country's fiscal credibility.
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