Leadership Briefing: 31 August 2026
What this week's policy thinking means for leaders
Each week brings a fresh set of economic data and research offering clues about the conditions in which organisations are operating. This time, the picture is cautiously encouraging - productivity may be improving, high-growth firms continue to make an outsized contribution, and the wider economy is proving more resilient than expected. However, the evidence also points to persistent constraints, from weak investment and uneven labour-market signals to the quality of the data behind major decisions.
Running through all four stories is a practical leadership question: how can organisations turn tentative improvements into sustained performance? Leaders cannot control the economic backdrop, but they can strengthen management capability, invest in trusted information and build the people, processes and technology needed to respond when opportunities emerge.
Reports and publications worth exploring
1. Productivity may be recovering
The Resolution Foundation’s latest Macroeconomic Policy Outlook points to a broad recovery in UK productivity, despite weaker headline data. Administrative tax data suggests output per hour grew by 1.1% a year over the two years to Q2 2026, after falling by 0.7% a year in the previous two. Growth was recorded in 12 of the UK’s 19 main sectors.
The gains appear to have come from better performance within sectors, rather than job losses or workers moving into more productive industries. Higher investment is not the explanation either: it has remained at around 19% of GDP.
AI may be contributing, but it is too soon to know. By June 2026, 46% of UK businesses used AI in some form, but only 4.6% used it extensively.
The priority is to understand what is driving the improvement and how to sustain it. Investment, technology and skills matter, but so does the way people and processes work together.
Read more: The Macroeconomic Policy Outlook: Q3 2026, Resolution Foundation
2. High-growth firms make an outsized contribution
A Competition and Markets Authority report highlights the outsized contribution of high-growth firms, or ‘scale-ups’, to UK growth, jobs and innovation. Although they make up a small share of businesses, they can lift performance across their industries through competition and new ideas.
The report also challenges assumptions about scale-ups. They span different ages and sizes, with businesses reaching their first period of employment-led high growth at around eight years old on average. Such growth is usually brief: firms spend about 15% of their lifetime growing at this pace.
High-growth firms tend to invest more and score better on management, but these traits do not reliably predict which companies will scale. A first burst of high growth, however, makes another more likely.
Being ready when opportunities arise is the central lesson. Sustaining growth means scaling people, processes and leadership alongside the business.
Read more: High-growth firms, Competition and Markets Authority
3. Data quality is becoming critical to confident decision-making
Ordnance Survey research involving more than 250 senior business leaders points to a growing ‘confidence deficit’ in strategic decisions. One in five regularly revisits major choices because the available data is incomplete or inaccurate, contributing to average delays of five months on major projects.
Some 39% said access to high-quality, trusted data would speed up decisions, while 34% highlighted trusted location data. The issue is especially important in infrastructure, climate risk and operational resilience, where decisions carry significant costs and long-term consequences.
More data is not necessarily better. What matters is knowing which information is reliable enough to support a confident decision.
Read more: Building decision confidence, Ordnance Survey
4. UK economy proves more resilient than expected
The latest House of Commons Library analysis suggests the UK economy is holding up better than expected. GDP grew by 0.4% in Q2 2026; compared with a year earlier, services output rose by 1.5%, manufacturing by 1.2% and retail sales by 3%.
However, the picture remains mixed. Quarterly productivity fell by 1.2%, inflation rose to 2.9% in July and unemployment reached 4.9%, or 1.77 million people. Real wages are still growing, but employment and payroll figures give conflicting signals about the labour market.
This is a story of cautious resilience, not a return to easy conditions. Organisations should stay flexible, use evidence carefully and keep investing in the capabilities that support long-term performance.
Read more: Economic indicators research briefing, House of Commons Library
Leadership takeaway
Taken together, this week’s evidence presents a more encouraging picture than the headlines might suggest, but one that still calls for caution. Productivity appears to be improving across a broad range of sectors, high-growth firms continue to generate value beyond their own organisations, and the wider economy is proving resilient. At the same time, investment remains weak, labour-market signals are mixed and poor-quality data is slowing important decisions.
The common thread is readiness. Organisations are more likely to benefit from an upturn when they have already invested in capable managers, trusted information, adaptable systems and the skills their people need. These foundations make it easier to recognise an opportunity, judge it well and respond without placing unnecessary strain on the organisation.
That does not mean trying to predict every change in the economic environment. It means creating enough flexibility to act when conditions shift, understanding what is driving performance, testing whether the evidence can be trusted and ensuring that people, processes and leadership capacity can scale together.
Resilience, in this context, is more than absorbing pressure. It is the ability to turn tentative progress into sustained performance. The task for leaders is therefore to strengthen the organisation before the moment of opportunity arrives, while remaining clear-eyed about the risks and constraints that have not gone away.
