Sterling’s value against the dollar has been declining for the past few weeks but in the early hours of 26 September, it fell to $1.035.
This was due to the announcement of tax cuts in the fiscal statement made by the Chancellor.
It was a record-breaking low for the pound and although it has seen a slight comeback since – currently sitting at $1.07 – this drop will have implications for British businesses in the coming weeks.
You may have already seen some of the effects of the weaker pound within your business.
How might you be affected?
If you import anything or have overseas supply chains, then you will likely see price increases as your pound won’t stretch as far as it normally would.
To make up for this added cost, you may have to consider temporarily upping your own prices for services.
Common UK imports such as oil and foods will see prices rise as a result of the pound’s declining value so you may need to match this to make a profit.
However, it’s not all bad news. If you export any goods overseas, you may see an increase in sales as it becomes cheaper for foreign buyers to purchase your goods.
Marco Forgione, director of the Institute of Export & International Trade (IOE&IT) said: “The weakening of the pound means that the UK is more attractive for investors and our exports are even more competitive. The investment in supply-side changes and support Government has offered UK businesses will only really work if more businesses take this opportunity to grow their export markets.”
For more advice on this topic, contact us today.
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