Week ending 12 June 2026

Welcome to this week’s edition. Three developments worth a founder’s attention, with our read on what they mean.

UK economy shrinks in April as the Iran war starts to bite

A strong start to the year has stalled, and for founders the question is whether second-half plans still rest on momentum that has now gone.

UK GDP fell 0.1% in April, the Office for National Statistics reported on 12 June, the first monthly contraction of the year after growth of 0.3% in March and 0.4% in February. A 0.2% fall in services output was the main driver, partly offset by a 0.1% rise in construction, while production was flat. The single biggest drag came from sports, amusement and recreation, where output fell 9.1%, the largest negative contribution from any one industry to both services and overall GDP.

The ONS linked part of that weakness to the cancellation of sporting events in the Middle East tied to the Iran war, alongside higher energy and fuel costs that firms flagged in their survey responses. Output was still 0.7% higher in the three months to April than in the preceding three months, so this is one month rather than a trend, but the direction marks a clear change from the early-year run. Suren Thiru of the Institute of Chartered Accountants in England and Wales described the figure as a “damaging descent into stagflation,” and said it made a Bank of England rate cut next week unlikely.

For founders, the useful read is not the single month but what it does to a plan. Forecasts built in the first quarter, when the economy was running warm, may now be carrying momentum that has gone. A stalling economy with sticky inflation is the harder environment to plan in, because it squeezes demand and costs at the same time. The businesses that navigate it well are the ones testing their second-half assumptions against a softer backdrop now, rather than discovering the gap when the numbers come in.

Phoenix works with founders to pressure-test forecasts against a changing macro picture. If that view would help, a Discovery Call is a good place to start.

Questions worth revisiting

• Does your second-half forecast assume the pace of early 2026, or has it been tested against a flatter economy?
• If demand softens while costs stay high, which of your lines is most exposed?
• Is your cash position built for a quarter or two of slower trading?

Source: ONS, via CNBC

A global whey shortage is pushing protein costs to record highs

For any brand built on protein, a doubling in a core ingredient cost is the kind of shock that decides whether a good year stays profitable.

The surge in GLP-1 weight-loss medications is reshaping the supply of whey protein, a core ingredient across shakes, powders and bars. Industry reporting in the week to 12 June described whey prices at record levels, with some suppliers already sold out for the rest of 2026 and manufacturers competing for limited allocation. A US Department of Agriculture report flagged tightening supplies of whey protein concentrate, and one manufacturer is reportedly planning to stop producing a widely used grade later this year, which would tighten supply further.

The demand picture behind it is structural rather than a passing spike. Patients on GLP-1 drugs are routinely advised to raise protein intake to preserve muscle while losing weight, adding a large new source of demand to an already growing market. The effect is being felt most sharply by smaller brands without the buying power of the majors. Erika Tamayo, founder of UK protein brand Hermosa, told The Guardian that ingredient costs have climbed steadily over two years and recently doubled compared with the previous quarter, adding that brands are “now all fighting for stock allocation.”

For founder-led sports-nutrition and health brands, this is a cost-of-goods event that can move faster than pricing. A whey input doubling in a quarter can turn a healthy gross margin into a thin one before a price review catches up, and locking volume at a higher price protects supply but ties up cash. The brands that hold margin through a squeeze like this tend to know their per-SKU cost structure well enough to see the hit coming, and to plan pricing, reformulation or purchasing around it rather than absorbing it by default.

Worth a conversation if a core ingredient cost has moved sharply this year and you have not yet mapped what it does to margin by product.

Source: The Guardian

Firms plan smaller price rises, but still expect their margins to shrink

The headline says pricing pressure is easing; the detail underneath says the margin squeeze is not, and that distinction is the one that matters for a founder.

The Bank of England’s May Decision Maker Panel, published on 5 June, found 57% of firms expecting to raise prices over the coming year, down 7 percentage points from April. On the surface, a sign that pricing pressure is easing. The detail is more cautious. Firms’ year-ahead expectations for their own price growth actually rose, to 4.0% in the three months to May from 3.8% in April, and 68% of firms still expected their profit margins to be lower, unchanged from the month before. Expectations for year-ahead CPI inflation rose to 3.7%.

So the picture is not that cost pressure has gone, but that fewer firms believe they can fully pass it on. The survey, which covers chief financial officers across the whole economy, points to businesses absorbing more of the energy and input shock in their own margins rather than in their prices, with demand and a softer labour market limiting how much they can charge.

For founders, that is the more useful signal. A widely reported “smaller price rises” headline can read as relief, when underneath it sits a margin squeeze that most firms expect to continue. The businesses that come through it best treat margin as something to manage deliberately, by product and channel, rather than a residual left over once costs and prices settle where the market allows.

Worth a conversation if your input costs are rising faster than you can lift prices, and you want a clearer view of where margin is actually holding.

Source: Bank of England Decision Maker Panel, May 2026

A debut win on the climb, and the case for backing your own read

The endurance events that reward steady judgement over reputation often map neatly onto how founders make their best calls.

At the European Athletics Off-Road Running Championships in Kamnik, Slovenia, over the weekend of 5 to 7 June, Britain’s Morven Goodrum won the senior women’s uphill title on her GB and NI debut. The race climbed 1,280 metres over 8.9 kilometres from Stahovica to Velika Planina, run in rain, wind and heavy fog, and Goodrum was the only woman to reach the summit in under the hour, finishing in 58:00, comfortably clear of Germany’s Laura Hottenrott and France’s Nélie Clément. Jacob Adkin took the men’s title the same day, completing a British double on the climb.

What stood out was not just the win but how she approached it. Racing her first championship, with no form line at this level to defend, Goodrum said afterwards that she simply went for it because she felt good and had nothing to lose. No expectations, a clear sense of her own condition on the day, and the confidence to commit to it against a field with far more reputation.

That maps onto a pattern founders will recognise. The best decisions are often made by the people who back their own read of the situation rather than deferring to who is supposed to win. The confidence to commit early, in poor conditions, against stronger names, comes from knowing your own position well, your fitness, your numbers, your real capacity. Phoenix works with founders to build exactly that clarity, so that when a decision needs backing, it rests on a clear read of where the business actually stands rather than a guess.

Source: European Athletics Off-Road Running Championships and England Athletics