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The Cash Index improved to 54.26 in Q2 2026.
Smart Currency Business is pleased to announce the launch of The Cash Index, a proprietary data model tracking cashflow pressures in the UK corporate trading environment.
Developed in conjunction with Cash is the King, this new study maps five equally weighted areas of cashflow conditions (working capital, demand, funding, costs and currency). The monthly score is tabulated on a zero to 100 scale, with 100 representing the strongest cash conditions and zero the weakest.
Commenting on the release, Alex Bennett, Managing Director of Smart Currency Business said:
“This new study provides a fascinating snapshot of what it’s like to do business in the UK. Up to now, many people would be able to give you a rough idea of current conditions. They may not have been able to say which aspect of their cashflow had become stronger or weaker. By drilling down into the data in these fundamental areas, we’re better placed than ever to provide comprehensive support and guidance to set companies up for long-term success.”
Methodology
The Cash Index uses publicly available information as its primary data inputs. All data is sourced from reputable independent third parties, including the Office for National Statistics, the Bank of England, the Insolvency Service and the Department for Energy Security and Net Zero.
Each of the five components is given equal weighting in the final score and takes a weighted average of rolling data to ensure the score captures both current levels and momentum pressure. The working capital component is calculated with insolvency and corporate administrative procedures. Demand is calculated through composite purchasing manager’s index (PMI) surveys along with business investment. Funding uses interest rates as its input, while costs use the fuel price index and average worker earnings. Finally, currency volatility is calculated by plotting daily variations in sterling prices against longer-term trends.
Smart Currency Business uses several static formulas to translate this data into the final score.
Q3 2026 results
The inaugural Cash Index found UK cashflow conditions improved for the third consecutive quarter. The score of 54.26 was the second strongest result since the start of 2022, reflecting the strong macroeconomic landscape.
Despite significant geopolitical headwinds, four out of the five underlying cashflow components improved from the previous quarter. The biggest improvement was seen in the currency segment, where volatility dipped after the shock of the Middle East conflict.
Funding conditions slightly weakened due to the Bank of England’s cautious approach to rate normalisation.
The Cash Index hit a post-pandemic high of 58.58 in the third quarter of 2021 and a record low of 35.29 in the second quarter of 2023.
