The UK’s small and medium-sized enterprises (SMEs) are concerned about the ongoing impact of political and Brexit uncertainties on the value of sterling, according to a new study.
World First’s latest Global Trade Barometer has revealed that more than a third (35 per cent) of SMEs are concerned that currency volatility amidst the triggering of Article 50, the upcoming General Election and beyond will negatively affect their business – while 25 per cent fear that they will struggle to manage their currency risks in coming months.
30 per cent of SMEs told the survey that their confidence has already been knocked by exchange rate movements in the last quarter – while a worrying number of businesses voiced fears that they may have to scale back on international trade.
Only a quarter of SMEs told World First that they intended to export their products and services in the next quarter, compared to a third (33 per cent) that currently do so.
Commenting, Jeremy Cook, Chief Economist at World First, said: “The fall in trading by UK SMEs clearly shows us that SMEs are doing less trade abroad. Higher costs of importing materials and squeezed margins are seeing businesses pull back from international trade.”
He warned: “Whilst fewer transactions of less value might be less risky for businesses, it could have a negative impact for the UK economy going forward.”
Separate research published by the International Business and Economics Research Group (IBERG) in recent weeks has argued that SMEs who export their offering will generally enjoy higher turnovers and greater productivity that their UK-limited counterparts.