Henry Zeffman: Andy Burnham and his chancellor have a battle on their hands

The Budget is only six weeks away and the economy is undoubtedly the biggest challenge facing Andy Burnham.

It is only 42 days until John Healey's first Budget, and there is increasingly apparent concern at all levels of the government and Labour Party about how that Budget can – or, as it may prove, cannot – substantiate Burnham's rhetoric about offering the biggest change in British politics in 40 years.

Much of the tricky economic environment, yes, is driven by global factors including the persistence, and to some degree worsening, of the conflicts in the Middle East and Ukraine.

And the AI boom pushing up borrowing costs is another issue affecting many countries.

But there are clearly domestic factors particular to Britain, and on that front it was very striking to hear the former Bank of England chief economist Andy Haldane telling LBC on Tuesday that without signs of cuts to public spending 'the markets now suspect that this is a traditional tax and spend socialist government with better TikTok videos'. He identified 'putting digital ID on hold' as an example of how he had already 'taken difficult decisions in this job in relation to reprioritising government spending' and vowed to continue to 'take difficult decisions to make sure the economy remains on track'. Digital ID is a striking choice of example. Burnham announced that he was abandoning the scheme in the days before he became prime minister so that he could focus on policies affecting the everyday cost of living.

Chancellor calls for 'confidence about Britain' despite 'historic high' borrowing costs. The Budget is only six weeks away and will be the first and most important sign of the new government's answer to that question. Chancellor John Healey has vowed to continue to take difficult decisions to make sure the economy remains on track.

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