Since the UK’s referendum on EU membership took place 100 days ago today, exporters have been the clear winners in the British economy due to the decision to leave.
- Quickly after the vote, sterling plunged to a 31 year low against the dollar and a 11% drop in trade-weighted value, which has immediately led to higher demand for UK goods
- Since Brexit, UK trade has seen a jump in exports, up by £800 million to £43.8billion
- More than a billion has been wiped off the UK’s trade deficit trade since the vote in June, with the gap down to £4.5billion, shrinking from £5.6billion before the referendum
- Exports from UK manufacturers have also been hugely impacted, reaching a two-year high in the aftermath of Brexit
Doron Cohen, CEO of Covercy, a cross-border business payments service enabling up to 80% cheaper transactional fees than traditional banks said:
“There’s no doubt that exports have languished in the last couple of years. Now that Brexit is a reality, the pressure will be on the government to open up new trade routes and recent progress with non-EU countries is to be welcomed.
“However, it is not only government who need to shape post-Brexit Britain, exporters really need to look at this as an opportunity to expand and grow their businesses into new and exciting markets.”
“Far from being ‘lazy and fat’ as claimed by international trade secretary Dr. Liam Fox, I think the sharp decline in the value of sterling will really act as a catalyst for exporters to look outside the EU for new trade partners, which will ultimately benefit Britain hugely. As strange as it sounds, Brexit may be a blessing in disguise for UK exporters, as it’s now probably the best time to sell their goods and services overseas for decades.”
However, UK Exporters Vastly Overpay On Overseas Transactions Due To The Banks
Meanwhile, research from Covercy today also reveals the extent to which UK exporters have been paying well over the odds for international payments, hampering their abilities to expand in a post-Brexit world.
Overall, traditional banks have a stranglehold of 95% of the business payments market and SMEs:
- For each transaction of £1,000 overpay £55
- For each transaction of £10,000 pay over £106 in needless fees
- For each transaction of £30,000 pay more than £220 in unnecessary charges
With over two-thirds (69%) of the UK’s 53,000 SME exporters making at least 20 transactions a month, paying over the odds for these transactions can really add up.
- One exporter making 20 transactions of £30,000 could overpay an average of £4,400 monthly or £52,800 a year in completely unnecessary fees
- For a company making 20 transactions of £10,000 this equates to £2,120 a month or £25,440 a year
- Meanwhile, for a firm conducting 20 transactions of £1,000 this will total £1,100 a month or £13,200 a year
Doron continued: “Unfortunately for years, banks have held these firms hostage with over-the-top and unnecessary transaction fees for cross-border transactions. This is because 95% of the business payments market is controlled by banks and this stranglehold must be finally broken.”
“Brexit has already brought huge uncertainty to importers and the current cross border payments market is stifling the growth of Britain’s exporters at a time, when these companies need to be able to expand to survive and thrive.”