Small firms lose £900m to currency markets

Date: 29th October 2008

Movements on the money markets are costing the UK business start-up sector up to £900 million a year, research has revealed.

A report from foreign exchange experts World First shows that small to medium enterprises (SMEs) are unsure of how to adequately protect themselves against fluctuations in currency.

Reinforcing these claims, a spokesman from the company pointed to currency activity between October 20th and 22nd, when the pound shed seven per cent of its value in just 48 hours.

Alex Sullivan, head of corporate foreign exchange at World First, commented: "In a week where the government has attempted to ensure the future of UK SMEs through tax cuts and training schemes … the pound has fallen to a five-year low against the US dollar."

It is clear that small firms need to be smart with the foreign currency they use to do business, he added.

Another pressing issue for business start-ups this week is the first deadline for the submission of self-assessment tax returns on Friday (October 31st), which an accountant could provide invaluable advice on.