Businesses rush to snap up BCC’s currency hedging product

THE British Chambers of Commerce has seen a surge in small firms taking out its currency hedging product to cover themselves against rising costs resulting from sterling’s weakness.

The BCC runs its product, called Chamber Foreign Exchange, in partnership with leading foreign exchange firm Moneycorp.

Dr Adam Marshall, who was made director-general of the BCC last week, said: ‘We’ve seen a five or sixfold increase in interest since the referendum. And when we ask businesses what their number one issue is, it is sterling.

‘It’s bigger for most in the short to medium term than issues around Article 50 or the terms of our EU exit, because it’s businesscritical straight away. I think most companies like sterling that’s not too strong and not too weak. Exporters struggle when sterling is overvalued. Importers struggle when it is undervalued. And so too do some exporters, who have to import raw materials or components.

‘I think the consensus now is that sterling is too low. So many firms are taking steps to deal with it. Some are looking at sourcing components, products or services within the UK. Others are looking to see if they can shift prices to maintain margins. Others are looking at hedging.’

Some small firms are being deluged with calls from elsewhere offering to help them manage the risks of wild currency swings. Alison Loveday, chief executive of law firm Berg, has seen examples of products that could contain unexpected costs.

She said: ‘Some people are being offered hedging products where the impact is not being explained or understood. It’s if they want to get out of the hedge that eyes start to water.’