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The survey of over 1,300 businesses found that 63% of businesses expect their costs to increase in the next 12 months as a result of the devaluation in sterling, including a quarter (24%) who expect costs to rise significantly. In comparison, only 6% of firms expect their costs to decrease.
Over 70% of manufacturers (73%) and business-to-consumer firms (71%) anticipate costs increases, compared to 55% of business-to-business firms, according to the results.
The survey also found that many businesses trading abroad are leaving themselves exposed to currency fluctuations, with nearly half (46%) of UK firms not taking proactive steps to manage currency risk. Smaller firms are less likely than their larger counterparts to be managing risk (44% of firms with 1-9 employees, compared to 70% of those with 50-249). Manufacturers have the highest proportion of businesses managing currency risk (76%), compared to B2C (57%) and B2B (39%).
The findings of the survey highlight the extent to which the depreciation in sterling is expected to compound the price pressures on firms, underlining the need to ease the domestic cost of doing business. There is also a clear need for more support and information for exporting businesses on the importance of managing currency risk. [...]