UK SMEs are not prepared for foreign exchange volatility

A member of the UK200Group of independent accountancy and law firms has commented on news that UK small businesses are not prepared for foreign exchange volatility if the Federal Reserve rate rises. According to a survey by payments technology company World First of over 1,000 senior decision makers at UK-based SMEs that are trading overseas, 70% felt their business could be better prepared.

Duncan Montgomery, tax partner at UK200Group member firm Whittingham Riddell, said:
“US rate rises are obviously good for many of our service sector exporters that price in dollars, with the expectation of an even stronger dollar. However, they are in a minority and without a balancing rate rise holding sterling firm against the greenback, many of our importers and general costs will drift upwards. Business needs to be proactive in looking at buying forward or currency hedging as there are some good deals out there, but the strongest business models we have seen involve generating traction both supply side and sales side in the same currency to de-risk it completely.”