UK Manufacturers Benefit From Weak Pound

Foreign exchange specialists Moneycorp, claims that Sterling’s record low against the Euro is boosting exports for Britain’s manufacturers in key markets.

With growing inflationary pressure evident for many manufacturers over recent months, favourable exchange rates are providing some welcome relief for exporters.

Moneycorp reports a marked increase in the number of exporters selling Euros to purchase Sterling, some even placing forward contracts to purchase more Sterling for later delivery.

The weakening of the pound could play a part in redressing somewhat the UK’s trade deficit.  Since 1999 UK exports have grown just 20% while imports have grown 44% over the same period according to International Trade Commission statistics.

But like much on the foreign exchange markets, there are swings and there are roundabouts.  As one exporter, Quentin Arnold of alternator manufacturer, Markon Sawafuji, puts it:

The one downside for us this year, as far as exchange rates are concerned, has been the weak Dollar. The US is also an important market for us and it has actually become quite difficult for us to sell there which speaks volumes for the effects that currency fluctuations can have on your business.