Sterling’s slump has forced importers to raise prices 9%

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WHILE most exporters are benefiting from sterling’s slide, importers are suffering and 61 per cent have raised prices – by an average of 9 per cent in the past 12 months – new research has found.

The study, conducted by East & Partners for American Express, found nine in ten small and medium-sized exporters were doing well from the pound’s fall, increasing their profit margins by 16 per cent.

And 95 per cent of those already exporting are now planning to take advantage of the low exchange rate by increasing exports further over the next 12 months.

But for small and mediumsized enterprises that only import, 81 per cent reported suffering. Their margins are falling by 13 per cent a year on average and a third plan price increases over the next 12 months.

Firms that both export and import were the most confident, with 95 per cent saying sterling’s slump had boosted business and increased profit margins. Jose Carvalho at American Express said: ‘Exchange rates have a huge impact on small firms with an international footprint, and on their ability to maintain their place in the local and global economies.’

More than a quarter said that currency volatility represented a risk, while a similar number highlighted cash flow challenges from trading globally, and said they were unable to predict what they would earn from a 30-day invoice. On Friday, sterling slipped to an eightmonth low of €1.11.

In a separate study, Lloyds Bank found that half of Britain’s exporters hadn’t reviewed their strategy after the Brexit vote.

This is despite the fact that the European Union was a trading partner for 85 per cent of exporters over the past year with 54 per cent reporting it as the region they have most exported to over the past 12 months.

Of those that had reviewed their strategies, a quarter planned to look to opportunities outside the EU. But a third planned to focus on domestic opportunities.

Clive Higglesden at Lloyds said this created a greater concentration of risk in the UK economy, and exposed companies to British economic cycles. He added: ‘Wait-and-see is not really an adequate strategy for exporters.’

In February, International Trade Secretary Liam Fox admitted it was ‘unlikely’ that the UK would achieve its goal of £1 trillion in annual exports of goods and services by 2020.

In September last year Fox was criticised for saying Britain was ‘too lazy and too fat’, and businessmen preferred ‘golf on a Friday afternoon’ to boosting prosperity. Exporters hit back saying they had little support from Government.

This month Fox announced a deal with Britain’s high street banks to extend millions of pounds of lending to small businesses as part of a plan to boost exports.