LONDON — Prime Minister Andy Burnham has chaired a new “growth situation room” as his government faces mounting pressure to strengthen the UK economy ahead of the October Budget.

The meeting brought together ministers and regional leaders as the government responds to an unexpected £1.8 billion public-sector deficit in July. Total borrowing for the first four months of the financial year has reached £56.7 billion.

The new growth-focused approach comes at a critical moment for Burnham’s government.

Finance Minister John Healey has stressed the importance of fiscal discipline, while ministers are seeking ways to maintain economic momentum without breaching the government's fiscal rules.

The latest economic data provides some encouragement. UK services activity strengthened in August, with the flash services PMI reaching 52.8, its highest level in six months.

However, higher borrowing costs and persistent inflation are limiting the government's room for additional spending.

The October Budget is now emerging as a major test of Burnham’s economic strategy, with businesses and investors watching closely for measures designed to support growth while keeping public finances under control.

The government is expected to continue working with regions and businesses as it develops its economic plans.

For Burnham, turning stronger business activity into sustained economic growth could prove crucial to the credibility of his new government.