The soaring success of the Olympics could hardly have come at a better time for the Government. After a confident start, the Coalition had descended into a farrago of Budget U-turns, economic torpor and increasingly acrimonious political disputes, a far cry from the dreamy promises of the Downing Street rose garden. The party atmosphere and stack of gold medals were a welcome distraction.
But even London 2012 has not been able to entirely mask the intensifying fracas in recent weeks. What was once sniping from the fringes has become thoroughly mainstream, reaching its apogee in this week's contretemps over Lords reform. In return for the Conservatives' reneging on the last of the Liberal Democrats' big asks, support was duly withdrawn from Tory plans to redraw electoral boundaries.
Nor, it appears, will the fractiousness end with a single round of tit for tat. The Prime Minister has vowed to press ahead with boundary reform anyway, potentially forcing Liberal Democrat ministers to vote against their own Government. Although unlikely to spell the end of the Coalition, as some suggest, such manoeuvres will not add to the bonhomie around the cabinet table, let alone in the corridors of Westminster. Meanwhile, the Liberal Democrats are set to register their continued dislike of government proposals for secret courts at next month's conference, with disapproving noises about email monitoring and welfare reform also expected.
To an extent, such posturing is no surprise. Political opposition is in the nature of the conference season, after all, and both parties are starting to look ahead to the next election. For all that it is understandable, though, for the Coalition to descend into electioneering so far from 2015 – with all but the agreement on deficit reduction likely grinding to an argumentative halt – is a grim prospect. There must be more than just cosmetics, then, in the Prime Minister's attempt at a Coalition re-launch this autumn. But he will need to be courageous.
The ministerial reshuffle, tipped for next month, certainly has little to offer. Even the Westminster rumour mill is only running at half speed, damped by the knowledge that, for all the flurry of speculation about George Osborne, not just the Chancellor but all the big beasts are set to remain in place.
When it comes to the economy, however, there is scope for real leadership. Attention should focus on housing. This newspaper has repeatedly called for a significant house-building programme: to mitigate decades of chronic underinvestment, to rein in prices still far out of kilter with incomes, to boost the flagging construction industry, and to create skilled jobs. With recession increasingly entrenched, and the Bank of England now forecasting no growth at all this year, there is no time to lose.
The good news is that some kind of housing stimulus is – finally – under consideration. The bad news is that it has already been delayed once, and expectations of an autumn launch are also on the slide. True, the constraints on the public finances mean the Government cannot simply throw money at the problem. But there are any number of creative options available – from a national housing bank, to tweaking the quantitative easing programme to get credit to housing associations, to policy initiatives to take on the Nimbys – if only the Treasury would be bold enough.
David Cameron has a real chance here, to make a difference to the economy and to renew the Coalition's sense of purpose. To do it, he must rediscover the ambition evident in the shake-up of education, say, or welfare. But he must act fast. As the Bank of England's gloomy prognosis plays out, the Olympic glow will quickly fade.