SMEs to push up prices as depreciating pound impacts business profits

Latest research shows that more than half of small and medium sized businesses (SMEs) in the UK plan to increase their prices this year, as a direct result of the weaker sterling.

The British Chambers of Commerce (BCC) survey of around 1,500 SMEs, found that the same proportion said currency was having a negative impact on their profitability, with rising import costs "squeezing" SMEs' margins.

Director General of the BCC, Adam Marshall, said inflation would be an "important concern for businesses over the coming year".

"The depreciation of sterling… has been the main tangible impact that firms have had to grapple with since the EU referendum vote," Mr Marshall said.

"For firms that import, it's now more expensive, and companies may find themselves locked into contracts with suppliers and unable to be responsive to currency fluctuations."

A separate poll of more than 100 large companies by Ipsos Mori, published by the Financial Times (FT), reveals 58 per cent felt the referendum result had affected their business negatively, while just 11 per cent of the companies thought Brexit had boosted their business.

Ipsos Mori chief executive, Ben Page, told the FT: “Business in this country is already feeling the pain of the economic upheaval of leaving the EU.

“There is no sign that this is likely to ease this year.”

At Beavis Morgan, we work with our clients to put processes in place which make it easier to run your business and to maintain effective management of your company’s working capital. We also assist with management accounts, enabling better control of your financial situation and awareness of the business in real time, enhancing planning for the peaks and troughs.

Contact Steve Govey or your usual Beavis Morgan Partner for further information about how we can assist you and your SME business.