Brexit is increasing the cost of doing businesses to SMEs, a survey by the British Chambers of Commerce (BCC) has found.
The fall in the value of the pound, triggered by last year’s vote to leave the European Union, has had a negative impact on 44% of businesses according to BCC’s International Trade Survey, and 68% said they expect it to increase their cost base in the coming year.
More than half (54%) expect they will have to increase their prices over the next 12 months.
“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,” said Adam Marshall, director general of BCC. “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 fluctuation.”
The survey found 45% of firms did not manage currency risk, and of those 46% said they were not expecting to do so in the next six months.
Although currency changes cannot be directly controlled by government, Marshall said ministers could help keep business costs down by “alleviating many of the up-front costs… starting the sledgehammer of business rates”.
Of the 1,474 businesses surveyed, 95% were SMEs, one third were manufacturing firms and four out of five sold products or services overseas.
☛ Want to stay up to date with the news? Sign up to our daily bulletin.