Handy Andy or Andy Pandy?? - Global market update

There isn't a single reason why the number 7 is considered lucky – it's a mix of history, religion, culture and even mathematics. It appears repeatedly in major religions – in the Bible, creation is completed in seven days, making 7 a symbol of completeness and perfection. Similar importance appears in Judaism, Islam, Hinduism and Buddhism. People notice it in many familiar patterns – seven days in a week, seven colours in a rainbow, seven notes in a musical scale and the traditional seven "classical" planets known to ancient astronomers. And, of course, casinos, lotteries and popular culture often associate seven with fortune – think of slot machine "lucky sevens."

Last week we saw the UK install its seventh prime minister in ten years, so the question is if this number symbolism is a meaningful sign that gives cause for hope or does it just show how bad things are for our neighbours! Andy Burnham exited the stage, having been confirmed Labour’s new leader to New Order’s 1987 anthem “True Faith”; whether this selection played to the Manchester angle or was a rally cry to his believers, some will point to the line in the song “I can’t tell you where we’re going / I guess there’s just no way of knowing” and wonder if this is the real reflection of what his future strategy looks like.

A prime minister’s powers are usually at their peak in the first few months of the job, and Burnham will have the added benefit of not facing Parliament on a daily basis given the summer recess. But his whirlwind ascent from mayor to prime minister has little precedent – few UK leaders have come to office so untested on their intentions. While he brings qualities such as a likeable charisma, an ease with the public and a facility with words, the UK, right now, is looking for a lot more – primarily a leader with a credible plan to reignite the growth needed to raise living standards and fund public services.

A strategy of applying nationally what has worked successfully in Greater Manchester looks possible on paper, but a mayor campaigning to get more money from government for their area can win applause and blame Downing Street if things go wrong. A prime minister’s job is to make agonising, often deeply unpopular trade-offs, and promising everything to everyone is a recipe for disappointment and ultimately disaster.

Burnham will face two balancing acts that will need to be successful. Firstly, he must create a sufficient sense of momentum among voters to secure re-election (remember he wasn’t actually elected as prime minister this time round!) and hence time to push on with his longer-term objectives. Secondly, he will have to find enough money in the straitened public finances to fund priorities without upsetting the bond markets, like one of his predecessors did so spectacularly.

At this point, the greatest worry seems to be the fact that his agenda doesn’t yet match where the UK currently sits in the world. Britain is in a precarious position, internationally and fiscally. His plans, while scant on detail, hark back to the better days of the 1980s, where he believes the roots of today’s malaise are, rather than outlining what the future might look like. As the WB Yeats poem goes, that UK is “with O’Leary in the grave”. While he says that he will be a “pro-business leader”, he has said little about backing entrepreneurs, encouraging investors and boosting science. The UK economy today is a service-based one, in stark contrast to the 1980s, and therefore the question of how it will earn its living will be fundamental to Burnham’s success.

As he takes office, contours of his policy agenda and Cabinet are emerging. Market fears that the new government will be more left wing than the last one, so the appointment of chancellor was always going to be key. John Healey has been named in that role, in contrast to previous media reports suggesting Shabana Mahmood would be in Number 11. Healey is former defence secretary and was a treasury minister under Gordon Brown, which can imply caution in terms of sticking to fiscal rules. Burnham also said that he will abide by the fiscal rules but will look at using flexibility within the existing fiscal rules to fund public investment – but the practicalities of the ‘flexibility’ are where the rubber hits the road.

When he starts addressing the country rather than party loyalists, many will hope to hear much more of a commitment to business and markets and to a dynamic and open economy as a driver of prosperity. For the sake of the country, many will hope for his success, but given he is an unproven leader on a national and international stage, he will have even more to prove – or else, seven will become eight!!