Over a third of UK businesses already feel negative impact of May’s hard Brexit

Nathanael Williams

SNP and Scottish Tories debate the fate of Scottish business as cold winds of Brexit close in

OVER a third of UK small and midsized enterprises (SMEs) have been negatively impacted by Brexit post-referendum, a new report by World First, the international transfer experts has found.

The research conducted by YouGov in collaboration with the trade foundation World First found that almost half of all UK SME’s feared the current plunge in the value of the British pound.

It comes after UK Prime Minister Theresa May said she would pull the UK out of the EU’s single market, leading to a quarrel with the Scottish Government over the threat posed to Scottish business and the economy from Brexit.

“Unfortunately, more SMEs are going to be thrust into the currency wilderness.” Jeremy Cook

Commenting on the post-referendum effect of a weaker sterling on UK SMEs, Jeremy Cook, Chief Economist at World First, said: “After the topsy-turvy year behind us, it is no surprise that SMEs are feeling currency fatigue and many are worried about the impact any further volatility could have on their business.

“Unfortunately, more SMEs are going to be thrust into the currency wilderness as hedging contracts purchased before the referendum start to expire. An increasing amount of SMEs will be starting to feel the pain of the weaker pound, feeding directly into import price-led inflation.”

In essence, this would mean when goods become too expensive to import as the UK pound becomes too weak.

According to World First, almost a third of businesses, 30 per cent, said that the volatility in currency impacted their investment decisions in 2016 and beyond.

“Until the UK government puts forward a credible plan uncertainty will continue to rise.” Alyn Smith

Alyn Smith MEP expressed concern that the report showed what was the tip of the iceberg of the effect of brexit on Scotland’s business: “Remember, Brexit has not begun to start to happen yet, and unfortunately, much of the damage caused is still to come. Until the UK government puts forward a credible plan uncertainty will continue to rise. Instead of attempting to bully and blackmail, the UK Government should reach out to our European allies.

“SMEs create jobs in communities across Scotland and we cannot afford to ignore their concerns. The negotiations that are about to commence will be difficult and for them to be a success the UK Government must stand up for the needs of the people of Scotland.”

However, Andy Cox, the Scottish policy convenor of the Federation of small business was more mixed in his attitude to the news stating that the low pound had seen an increase in exports. Yet the FSB’s formal position still emphasises the need for full access to the single market and for the rights of EU nationals to be guaranteed.

A spokesman for the Scottish Tories told CommonSpace: “Every piece of Brexit-related scaremongering the SNP has embarked upon hasn’t come to pass. As such, no-one will take these latest warnings seriously.”

The UK Government will begin the process of leaving the European Union next month after the Brexit bill passes through the House of Lords on March 7.

Picture courtesy of Images Money

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