Brexit - the fall out begins

Posted on the 19th August 2016 by Hamish Anderson in Founders' blog

Decreased exchange rates make money transfers more expensive

The formal Brexit process hasn’t even started, but we’re already feeling the impact of the referendum result.  Sterling has depreciated by more than 10% against the major currencies and hit its lowest level against the USD for almost 30 years.

Anticipating an economic slow-down, the Bank of England cut rates to a record low of 0.25% at the MPC meeting in August. Gold has rallied alongside other ‘safehaven’ assets. Anecdotal evidence suggests that investment in the UK has contracted and both UK CPI and RPI have risen in July, principally due to the higher costs of imports.

Money Mover users all have currency exposure. It’s why they use us. Those which need to convert GBP to other currencies – to pay overseas suppliers, for example – have been hit hardest by this sudden increase in costs. We asked a couple of our customers how Brexit is impacting them so far…

Max Henderson, the Co-Founder of Hotpod Yoga, which provides hot Vinyasa Yoga classes in their own inflatable, heated studios, explained that “as a small, growing, international business currency fluctuations and uncertainty are always painful. While a weakening GBP has had some positive impacts for us, on balance, in the short term it’s been harmful – pushing up our import costs significantly.”

The sales import director of another of our customers, one of the UK’s leading printers of promotional merchandise, told us that he has seen the cost of imported goods increasing by around 15% since the Brexit referendum and this has put off some of their customers from placing orders. Thankfully, overall, they have not seen drop in sales.

This makes it all the more important that any international payments we do make are carried out as efficiently and transparently as possible – which is where Money Mover comes in.

We’ll continue to report back on the impact of Brexit on our customers as the situation progresses. We’d love to hear of your experiences or insight."

Email us with your experiences and insights.

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