Andy Burnham is now nearly three weeks into his job as Prime Minister, but what do economists make of what he’s done so far?

With inflation still above the 2 per cent target level – and due to go higher this autumn – and the Bank of England (BoE) keeping interest rates at the same level yet again last month, many will be wondering when they may start to see financial improvements to their lives.

Below, we collate the thoughts of three economic experts, each of whom assesses what Burnham has done so far, and what it means for the economy and the pound in people’s pockets.

Thomas Pugh – chief economist at audit, tax and consulting firm RSM UK

Burnham inherits an economy where living standards have barely moved in almost two decades. Real wages are just 4.1 per cent above where they were at the start of 2008. Against that backdrop, his promise to “give people some breathing space now” works politically and is a deliberate contrast with Sir Keir Starmer’s early focus on fiscal restraint.

However, the announcements made so far on VAT cuts for electricity bills, bus fare caps and reductions in business rates for pubs highlight the fundamental challenge the new Prime Minister faces.

He doesn’t have the fiscal space – the financial wiggle room – to provide meaningful support for the cost of living in the short term without spooking the bond market and being accused of becoming another “Liz Truss”.

Together, these new policies probably cost around £1.5bn. That sounds significant, but it amounts to roughly 0.1 per cent of annual government spending – too small to alarm bond markets, but not enough to materially change the outlook for households or the economy.

The VAT cut and cheaper bus fares may shave a fraction off inflation but the effect is likely to be dwarfed by movements in wholesale energy prices or food costs. Politically, these measures demonstrate intent. Economically, they barely move the dial.

Burnham’s broader agenda rests on four pillars: public control of essential services, mass housebuilding, greater regional devolution and re-industrialisation. Each could improve the UK’s long-term growth potential if executed well.

Equally, history provides plenty of examples where similar policies have failed to deliver the promised gains. This isn’t the first time we have heard promises to build millions of houses, for example.

The evidence is mixed and, even in the best-case scenario, the benefits would emerge over decades, and Burnham doesn’t have that amount of time.

That means some significant action at the next budget to help with the cost of living. He will also have to find money for his other priorities like more council house building, a potential reform of social care and higher defence spending.

That leaves the Chancellor with some awkward arithmetic. Burnham has pledged to stick to the fiscal rules, limiting his ability to borrow freely, while Labour’s manifesto commitments largely rule out increases in income tax, VAT and national insurance, which together account for around two-thirds of tax revenues.

If spending is to rise meaningfully, either borrowing must increase within the limits of the fiscal rules, hence the talk of “flexibility” on borrowing, or other taxes will have to do more of the heavy lifting.

A tax, spend and borrow budget might support growth in the short term but it would ultimately be inflationary, since it adds more demand to the economy through spending and investment than it removes through taxation.

That would make it more likely that the BoE delays rate cuts further, or even raises rates later this year if energy prices are still high.

There is also a risk that tax rise concerns cause a spike in uncertainty that weighs on confidence and activity later this year, similar to what happened at the previous two budgets. That could temporarily dampen growth.

Burnham has ruled out making changes to stamp duty – the tax on buying a home – in the short-term, which is a missed opportunity to boost growth. It discourages mobility which undermines economic efficiency.

If he were to ever look at it again, abolishing stamp duty altogether and replacing it with a reformed property tax based on up-to-date valuations could be a good option.

Ultimately, much of what Burnham has set out is sensible. Most economists would agree that building more homes, improving infrastructure and raising investment are worthwhile objectives. The challenge will be convincing voters that those policies are working long before their benefits are likely to appear.

That creates a powerful political temptation to reach for short-term giveaways and higher public spending. But with inflation still above target, interest rates elevated and financial markets watching closely, there will be a significant cost to any ‘spend now, pay later’ policies.

Edward Jones, professor of economics at Bangor University

Burnham’s economic measures, so far, have been modest. The temporary electricity VAT cut, the £2 bus-fare cap, and lower business rates for pubs, clubs and music venues will help the households and firms affected. They should give disposable income and local spending a small lift but they are not large enough to impact the UK’s growth rate materially.

The electricity measure is expected to reduce consumer prices index (CPI) inflation while it remains in force. That will improve the headline number temporarily. It does much less to address the pressures that concern the BoE, particularly the risk that higher energy costs feed into wages and other prices.

The BoE most recently held interest rates by six votes to three, with three members favouring an increase. Burnham’s announcements are therefore unlikely to drive the next interest-rate decision. Energy prices – let’s see what happens with Iran on this – and the scale of any fiscal loosening (tax cuts or spending increases) in the autumn Budget will carry considerably more weight.

There is a potentially more important announcement developing around technical education, devolution and access to growth capital. The proposed technical pathways from age 14 could improve the connection between education and local employment.

Giving English mayors a share of locally raised tax revenues may strengthen incentives for growth, while the proposed scale-up fund could help British firms and start-ups obtain finance.

But these policies will take time to feed through. The main test for Burnham is fiscal credibility. Funding sources have been identified for the early measures, although some rely on savings, compliance revenues or changes to tax reliefs that have yet to materialise.

Markets have already shown that they are sensitive to suggestions of a looser fiscal stance. The Budget on 28 October will need to show that permanent commitments have permanent funding and that Burnham’s larger ambitions are compatible with the fiscal rules. Otherwise, I suspect the markets will be pushing higher government borrowing costs, which will dampen economic growth.

Chris Martin, professor of economics at the University of Bath

Burnham talks a good game, but I think we have to focus on his actions, and so far, there has not been much on the economic front.

The plans for devolution sound sensible, but will only really pay off in the long run. The plans for social care seem brave, but again will only kick in over the longer term.

Having promised to keep to the Starmer manifesto, and to not raise the main rates of tax, there is little room for manoeuvre. I had hoped for a striking statement of intent on e.g. the triple lock on pensions, or Europe. But nothing so far. So it looks like former defence secretary John Healey will continue with the policies of former chancellor Rachel Reeves.

It is even harder than usual to predict growth, inflation and interest rates since so much is uncertain and beyond the influence of the UK. There has been decent growth so far this year, inflation has been lower than expected and the Bank seems reluctant to raise the base rate. But the situation is fragile.

One rogue missile, or Truth Social tweet from Donald Trump, could undo all the slow and steady improvements.

The thing that is worrying me is the cost of Government borrowing. The ten-year rate has been over 5 per cent for a while now. Spending plans that seemed affordable now seem more risky.