According to the Bank of England Deputy Governor for monetary policy, Dr Ben Broadbent, the fall in sterling since the Brexit vote has given a short-term boost to UK exporters.
In a speech at Imperial College Business School, Dr Broadbent said that whilst the fall in the pound had impacted on the public through “a rise in import prices and a squeeze on households” real income, Britain’s exporters are benefiting from an economic Brexit “sweet spot”.
He estimated that the 15 per cent collapse in sterling against the dollar since the referendum has pushed up exporters’ profits by 2 to 3 percentage points.
“The result is something of a sweet spot for exporters. Sterling fell sharply after the referendum and, despite the strength of consumption since then, has remained close to record lows,” he said.
Whilst exports may be benefitting from the drop in the value of the Sterling, the UK is still heavily reliant on a consumer driven economy.
With clear signs of more subdued and cautious consumer spending as the UK looks to exit the European Union, businesses must ensure they have the right structures in place to respond quickly to the changing market conditions.
Our business experts at Beavis Morgan are able to guide you on your strategy and assist in making those all-important business decisions that will have the greatest impact on future success.
For further information, contact Steve Govey or your usual Beavis Morgan Partner.