Firms 'ahead of politicians'
Companies seek new post-Brexit trading partners
Firms are increasingly seeking out non-eurozone trading partners
British businesses are anticipating post-Brexit changes to trade by looking to new markets for their imports.
UK companies spent a third more – in sterling terms – on imports from non-eurozone and developing countries in 2017 compared with 2016.
That is more than double the increase in spending on imports from Britain’s more established trading partners in North America, the Eurozone, Australia and New Zealand.
The analysis, of more than 28,500 transactions made through FEXCO Corporate Payments, shows that demand for ‘exotic’ currencies – excluding the euro and the US, Canadian, Australian and New Zealand Dollar – picked up dramatically throughout 2017.
While the number of transactions remained broadly the same – up just 6% on 2016 – the average transaction size rose by 28% to £5,057.
The biggest jump in trade was with India, with British businesses spending 365% more on Indian Rupees. The second biggest leap in imports was with the Czech Republic, with UK firms making 39% more transactions and spending 65% more on Czech Koruna than in the previous year.
Purchases from South Africa also rose sharply, with the total value of imports rising by 42%, while imports from Poland picked up by a quarter – with FEXCO recording a 24% increase in the number of transactions and a 27% jump in the amount spent on Polish Zloty.
Overall, the 33% increase in demand for ‘exotic’ currencies was more than double the 14% increase in businesses’ spending on ‘major’ currencies.
David Lamb, head of dealing at Fexco Corporate Payments, explained: “With Brexit barely a year away, Britain’s trade negotiations with the EU still have a long way to go.
“But while politicians agonise over the UK’s future trading relationship with Europe, many businesses are one step ahead, and already forming partnerships with new markets.
“While the weak pound has forced businesses which import regularly to look for alternative suppliers in countries with a more favourable exchange rate, the steady rise in imports from developing economies and other non-Eurozone countries cannot be dismissed as a mere cost-saving exercise.
“Instead the increased willingness of British businesses to look beyond the usual suspects in the Eurozone and North America could be seen as the first stirrings of the ‘Global Britain’ that Brexiteers hope a non-EU UK will become.”