The depreciation of the pound appears to be having a negative impact on small to medium-sized businesses’ (SMBs’) sales margins, with 54 per cent of companies in the UK admitting that they’ll likely have to hike their prices up for goods and services over the coming year as a result.
This is according to the British Chambers of Commerce’s (BCC’s) latest International Trade Survey, also revealing that 44 per cent of SMBs say that the recent drop in Sterling is having a negative impact on their domestic sales margins.
Interestingly, the drop in the pound may actually be helping some exporters in the UK, however, with the study showing that 25 per cent of SMBs are reporting a positive impact on export margins, while 22 per cent report a negative impact.
“Our research shows that the falling pound has been a double-edged sword for many UK businesses. Nearly as many exporters say the low pound is damaging them as benefiting them. For firms that import, it’s now more expensive, and companies may find themselves locked into contracts with suppliers and unable to be responsive to currency fluctuations,” director general of the BCC Dr Adam Marshall said.
However, the Bank of America has now said that the pound could rise by about seven per cent against the dollar in the near future if favourable trade deals can be secured by the UK ahead of Brexit. The Bank has suggested that the panic about leaving the EU is likely to subside come March when Article 50 is triggered.
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