As the consequences of Brexit continue to surface, fluctuations in the British pound are likely to continue, states the British Chambers of Commerce. (BCC)
Over half of small to medium sized enterprises in the UK claim that they will have to raise their prices throughout the year because of Britain’s weakening pound.
According to a recent survey, more than half of the participants questioned stated that they will be increasing their prices in 2017.
The pound has lost 16 percent of its value to the dollar since the UK left the EU. This has caused an increase in the cost of imports.
Since Brexit, the impact that has been felt the most has been the decline in sterling.
The majority of exporters claim that the decision has been of no benefit to them whatsoever.
Director General for the BCC has stated: “Despite the fact that there has been no significant rise in inflation, companies are still feeling a great deal of pressure.”
“For import businesses prices have increased, and firms may find that they are bound to contracts with suppliers without being able to renegotiate as a result of the currency changes.”
As the Brexit dilemma continues to manifest, it is likely that currency fluctuations will continue. Mr Marshall also stated that the Government should be responsible for taking the load off British companies by lowing business rates. Philip Hammond is due to reveal his next Buget on March 8th.
The survey results were disclosed shortly after the Bank of England announced that there would be a 2% rise in inflation in 2017.
There is some good news; the economy is expected to grow by 2 percent, which is more than the original forecast which predicted a 1.4 percent increase.