Britain's new Prime Minister, Andy Burnham, has promised a radical transformation of the country's economic model, calling it the biggest change in four decades.

His statements come at a time when the British economy is facing slow growth, high inflation and great pressure on public finances.

Speaking outside the prime minister's residence at 10 Downing Street, Burnham vowed to turn the current situation into a turning point for the country.

"We will make this moment a turning point for Britain, moving forward with the biggest changes in 40 years, a new political model and a new economic model," he declared.

More role for the state

Burnham said he aims to create "a new economy," where basic goods and services will be returned under stronger public control, with the aim of making them more affordable for citizens.

He also promised to reindustrialize the country and use public procurement to support British industry.

"We will build a new economy where the essentials of everyday life are brought back under stronger public control so that they become affordable again," Burnham said.

Cost of living package

The new prime minister is expected to present a package of measures to ease the cost of living, along with a plan for financing them, on Tuesday. Later this year, the government will also publish a 10-year economic strategy for the country's development.

Fiscal challenge

Despite plans to expand the state's role in the economy, Burnham has promised to adhere to fiscal rules and not raise major taxes.

However, experts warn that this target will be difficult to achieve, as borrowing costs remain high and financial markets are carefully monitoring the government's fiscal discipline.

ING economist James Smith said Burnham's ambitious agenda, which includes investment in social housing and the possibility of nationalising some sectors, is limited by his commitment to respecting fiscal rules and avoiding large tax increases.

Markets in waiting

Investors are closely watching economic developments in Britain. The yield on 10-year British government bonds reached around 5%, about 1.5 percentage points higher than levels before the crisis caused by former Prime Minister Liz Truss' mini-budget.

Analysts believe this reflects not only higher global interest rates, but also the markets' growing concern about the fiscal sustainability of the new British government.