A survey carried out by the British Chambers of Commerce (BCC) has revealed that 54% of small and medium-sized enterprises (SMEs) expect to have to raise the prices of their products and services in the coming 12 months due to the depreciation of Sterling.
Since the UK’s vote to leave the EU last June, Sterling has fallen by around 16% in comparison to the dollar.
44% of businesses reported that the devaluation of Sterling is having a negative impact on their domestic sales margins. Meanwhile, 25% of firms revealed a positive impact upon export margins, while 22% reported a negative impact.
The survey, which is based on responses from 1,500 UK businesses, also found that 45% of firms currently do not manage currency risk, with 46% revealing that they don’t expect to manage this in the next six months.
Adam Marshall, Director General of the BCC, commented: ‘The depreciation of Sterling in recent months has been the main tangible impact that firms have had to grapple with since the EU referendum vote.
‘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.’