Is change going to be as good as a holiday for UK business?

After a year of global uncertainty we have yet more change, in the shape of a new Prime Minister who has pledged to be “pro-business” and “drive growth in every postcode” through reindustrialisation and devolution of power.

How this plays out and whether it provides space for the UK to set a growth agenda in a world which continues to be blown by the winds of geopolitics remains an open question.

Yet business does not have the luxury of being an engaged bystander. It has to plan ahead, adapt strategy and investment plans and prepare now for H2 and beyond. 

So, what are the risks and opportunities that will set the stage in the second half of 2026 and how does business engage with the actors who will influence the corporate and political environment? We asked our team of discipline experts to cast ahead with their analysis and predictions.

All change in Westminster (Fraser Raleigh, MD, Public Affairs and Government Relations)

The second half of 2026 will be defined by the start of a new political project.

Andy Burnham has promised a new political and economic model. That is strongly defined as a rejection of the model begun in the 1980s, which he believes “centralised” political power and “privatised” economic power. His response is rooted in devolution, greater public control of utilities and services, and reindustrialisation.

Business will be sizing-up Burnham over the coming months. He has promised to be a pro-business leader and has a good track record of business engagement to point to from his time as Mayor of Greater Manchester. There are fences to be mended after the Starmer government, whose pro-business credentials never really recovered from the hike in employer National Insurance. The new Chancellor John Healey – a surprise appointment - should also be well-placed to calm jitters in the market about coming changes to tax and spending, as well as being respected across the party.

Labour has pressed the emergency button to eject their election-winning but charisma-light leader, Keir Starmer, for a more authentic and effective communicator who they hope can make them feel good again in the short term and – more importantly - can win them the 2029 general election. 

And so, business has not just to understand the new Burnham government but anticipate what might come after that election. That has never been more complex. 

Five different parties lead the four governments across the UK. A sixth (Reform UK) has been leading the opinion polls for more than a year, while a seventh (Conservatives) boasts the most popular - or least unpopular - leader. An eighth (Liberal Democrats) could well find itself kingmaker in a coalition government, and a ninth (Greens) continues to snap at the heels of Labour in its urban heartlands.

Add to this the geopolitical headwinds and economic shocks which the UK must contend with, and rapid remilitarisation to protect against the risks of aggression from Russia and beyond, and it is clear to see how intertwined the connection between business and political complexity has become. 

Navigating geopolitical risk (Alistair Kellie, Practice Head, Communications)

The second half of the year will see a continuation of geopolitical challenges and machinations. The biggest single risk in geopolitics remains the words and actions of President Donald J. Trump. Whilst some of his rhetoric can be discounted as another likely TACO (Trump Always Chickens Out) and some of his actions are priced in, we need to look back perhaps half a century for an individual who is the cause of so much uncertainty for every major market. Looking ahead, there’ll be a continued need to scenario plan for tariffs, sanctions and export controls, not to mention security.

Defence, economic security and corporate resilience are converging, with greater scrutiny of supply chains, cyber preparedness and operational resilience. The two major conflicts - or as we might come to call them, wars - in Ukraine and the Gulf see no sign of abating, and actually risk wider conflation. Both conflicts have demonstrated the vulnerability and interconnectivity of global supply chains. They’ve also shone a light on the willingness (or lack thereof) and ability (or lack thereof) of the US to positively shape and maintain the security status quo in Europe and the Gulf region. They’ve highlighted that companies, no matter where they operate, cannot afford to take security and stability for granted and contingency planning is essential.

Cyber, AI and information warfare are now significant geopolitical risks. Indeed, today the EU’s tech chief, Henna Virkkunen, has warned that AI has become a geopolitical weapon, pushing for Europe to develop its own alternatives to US models faster or risk being cut off from strategic capabilities. We’re already seeing disinformation, cyber-attacks and strategic influence operations (including below-the-line digital) feature more regularly and regulators increasingly treating advanced technology as a national-security issue. Companies now recognise that they must treat cyber resilience as a reputation issue, not just an IT issue. As such, there must be regular reviews of crisis response and misinformation protocols and detailed scenario planning.

Finally, it’s apparent that stakeholder expectations are becoming more political and businesses increasingly operate in a world where politics, reputation and commercial outcomes are intertwined. As such we’re expecting an increased focus on “corporate diplomacy”, which we term as the capability to navigate the political, regulatory and societal forces that shape business success, building trust and influence across stakeholders while aligning global strategy with local realities.  

Defence of the realm (Dafydd Rees, Senior Counsel) 

The defining characteristic of the second half of 2026 is likely to be the convergence of defence investment, economic security, and corporate resilience. I’ve been increasingly struck by the emerging consensus among defence experts, business, and finance that the concept of national resilience does not simply apply to a military mindset.  

Strengthening supply chains and mobilising private capital in making Britain ‘war-ready’ has not seemed this important for over a generation and certainly not since the end of the Cold War. Business will be judged not simply on financial performance but on their contribution to secure supply chains and ensuring national resilience. 

The distinction between defence, critical infrastructure and the private sector will continue to blur. By the end of 2026, UK corporates should also anticipate far greater government scrutiny of supply chain security, cyber-resilience, as well as operational preparedness. 

There are new opportunities for business operating in technology, advanced manufacturing, energy, data infrastructure, and financial services. Investors are increasingly rewarding businesses that demonstrate resilience and strategic value.  

There are also new threats. Geopolitical disruption, disinformation, and cyber-attacks are the new normal for every business, large or small.  

The reality that resilience requires a whole of society approach is a lesson learned from history that we look set to have to relearn once again, alongside the critical importance of a close and creative partnership between business, finance, and defence.  

In the next edition of SEC Newgate News (Tuesday 28 July), our expert team will look at how corporates engage in this world of change, and we conclude this H2 planning series on Tuesday 4 August looking at the impact in the UK’s devolved nations and regions.