Week ending 26 June 2026

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

The economy contracts for a second month, and demand is the signal beneath it

A second monthly fall in private-sector activity, with services at a three-year low, says more about demand than the small size of the drop suggests.

The UK private sector contracted for a second consecutive month in June, according to the S&P Global flash PMI released on 23 June. The composite output index came in at 49.4, down from 49.7 in May and a fourteen-month low, with any reading below 50 signalling contraction. The services business activity index fell to 48.7, its weakest in over three years. Manufacturing output rose to a twenty-one-month high, but the survey put much of that down to customers bringing orders forward ahead of expected disruption, a lift its compilers expect to fade. S&P Global’s chief business economist described an economy that has contracted for a second successive month and essentially flat-lined across the second quarter.

The headline drop is small. The composition is the part that matters. Services are the bulk of domestic demand, and a three-year low there points to customers growing more cautious rather than to a passing dip. For a founder-led business, that tends to land as softer demand and slower-paying customers before it shows up in any official growth figure.

The discipline this week is to check your demand assumptions against your own evidence rather than the headline. The run rate from the start of the year is no longer a safe base for the second half. Your own leading signs, enquiry volume, conversion, repeat rate and average order value, will tell you sooner than the national data whether your market is softening, and give you time to protect cash while the choice is still yours.

If you’d like a clearer read on what softer demand does to your plan and your cash, a Discovery Call is a good place to start.

Questions worth revisiting

• Is your second-half forecast built on the start-of-year run rate, or on what your pipeline shows now?
• Which of your own demand signals would tell you first that the market is cooling?
• If demand softened from here, how many months of cover would your cash give you?

Source: S&P Global Flash UK PMI, June 2026

A change at the top, and what to do with decisions that hinge on it

A change of prime minister and an unsettled tax outlook tempt founders to freeze. The more useful move is to sort the decisions that depend on the politics from the ones that don’t.

Sir Keir Starmer resigned as prime minister on 22 June, leaving the country heading for another change of leader, with Andy Burnham the early frontrunner. Against that backdrop, Department for Business and Trade figures reported this week showed inbound foreign direct investment fell to 1,020 projects in the latest year, a record low and the third successive annual decline, attributed in part to uncertainty over policy and costs.

Politics like this creates uncertainty, and the question for a founder is what you let that uncertainty do. You can let it hold you back, waiting until the picture clears, or you can keep operating inside it. The risk in waiting is that the picture does not clear for some time, while paused decisions quietly cost ground.

The more useful response is to sort your pending decisions into two groups. Some depend on the fiscal outcome: a large capital commitment whose return turns on tax treatment, or a structure a Budget could change. Those deserve scenario planning rather than a guess. Most do not. Hiring to meet demand you can already see, fixing a margin that is leaking, tightening cash collection, these stand on their own merits whatever the next Budget brings. Acting on the second group while you model the first keeps the business moving when the temptation is to wait.

A question worth sitting with

• What are you holding back on that doesn’t depend on the next Budget?

If it would help to separate the decisions that hinge on policy from the ones that don’t, that is the kind of question a Discovery Call is built for.

Source: Department for Business and Trade inward investment figures

Sterling looks overvalued, and imported margin is where it lands

Goldman Sachs rates the pound the most overvalued currency in the G10. For any brand that imports stock or ingredients, that is a margin question worth getting ahead of.

Goldman Sachs’ research has the pound as the most overvalued currency in the G10. On the bank’s valuation model, sterling has overshot its fundamentals, held up in large part by UK inflation sitting higher than in much of the developed world, which has drawn money toward UK assets and supported the currency. Goldman’s view is that this support is unlikely to last.

For a brand that buys stock or ingredients abroad, a relatively firm pound has been quietly helpful. It lowers the landed cost of anything priced in dollars or euros and flatters the gross margin on every imported unit. The risk in that is treating today’s exchange rate as a fixed feature of the cost base when it is closer to a market position that can move.

The useful work is to know your exposure and test it. What share of your cost of goods is priced in a foreign currency, and what happens to your gross margin if the pound falls back several percent. A brand that has run that number can decide deliberately whether to take forward cover on known purchases, hold a currency buffer, or carry the risk with its eyes open. A brand that has not is leaving a real part of its margin to a rate it does not set and has not planned for.

Questions worth revisiting

• What share of your cost of goods is priced in dollars or euros?
• If the pound fell several percent, how much of your gross margin would move with it?
• Have you decided, rather than defaulted, whether to cover that exposure?

If you import a meaningful share of what you sell and haven’t stress-tested the margin for a weaker pound, that’s worth a conversation.

Source: Goldman Sachs, 2026 FX outlook

268 miles, and the case for a pace you can hold

The winner of the women’s race at Britain’s most brutal ultramarathon led from the front for the full distance. The lesson is about the pace you can sustain over a long horizon.

On 18 June, Jenny Hartley won the women’s race at the Montane Summer Spine, the summer running of what is often called Britain’s most brutal ultramarathon. The race covers the full 268 miles of the Pennine Way, from Edale in Derbyshire to Kirk Yetholm in the Scottish Borders, non-stop and self-supported, with more than 10,000 metres of climbing and days of broken sleep. A Shropshire GP and Army veteran, Hartley led the women’s field from start to finish and crossed the line in 104 hours, 55 minutes and 46 seconds. Ed Payne won the race overall in 82:28:07.

A race like the Spine is not won with a fast mile. It is won by holding a sustainable pace while managing everything that erodes it: feet, sleep, weather, navigation and the kit you carry on your own back. The runners who come undone are usually the ones who set off quicker than they could keep up. The ones who finish well, and lead, are the ones who settled on a pace they could hold when it got hard and then held it.

It is a clear picture of how a long effort is sustained, and the same holds for building a business. Progress over a long horizon comes from a pace you can maintain on a base that supports it, not from the fastest possible start. Phoenix works with founders to build that base, the numbers you can see, the cash you can predict and the composure to hold a long line, so the hard stretches are run at a pace that lasts.

Source: Montane, Summer Spine Race results 2026