An increasing number of UK small and medium-sized enterprises (SMEs) that import and export their products across the globe are re-evaluating their international trade strategies due to currency-related fears, a study suggests.
Recent research carried out by money transfer service AFEX found that 71 per cent of UK SMEs thought that their currency risk mitigation strategy was hit by Britain’s vote to leave the European Union (EU).
An additional 34 per cent of respondents added that currency volatility affected their business operations last year – up from just 19 per cent in 2015.
13 per cent of firms told AFEX that they had given up on international growth plans last year, while nine per cent added that they had reduced the size of their business as a result of currency volatility.
However, ten per cent of those quizzed said that their business benefitted from falls in sterling, and that they actually accelerated their growth plans as a direct result of the weaker pound.
Going forward, the vast majority (83 per cent) of businesses have said that they will remain committed to international trade and global commerce in the year ahead, despite anticipating continued currency volatility throughout 2017.
17 per cent of SMEs have plans to increase the prices of their international goods and services within the next three months, while a further 14 per cent expect to hike their prices before the end of 2017, the report found.
CEO of AFEX, Jan Vliestra, said: “Uncertainty and concerns over currency volatility dominate this report with the fallout from the EU Referendum looming large for UK importers and exporters.
“These findings reveal that many firms are looking at ways to factor in this uncertainty and are revisiting their business models – be that by changing their pricing, renegotiating their contracts or more actively managing their currency risks”.