Breaking News! No One Benefits from a Weak Pound. Not Even Exporters

At the start of September, the pound fell to its lowest level since the immediate aftermath of the EU referendum result in 2016. On that occasion, its value quickly rallied as markets and currency exchanges adjusted to the new political reality. This time, with the UK in a state of political turmoil and a no-deal Brexit looking ever more likely come 31st October, there are concerns Sterling could endure at its weakest value in 35 years for the foreseeable future.

A weak pound means a weak economy. Forget all attempts to dress it up otherwise. And on the front line feeling the sharp edge of its effects are the small businesses trading overseas which are having to deal with eroding margins and turbulence in their supply chains.

In truth, UK businesses have been adjusting to a weak pound for the last three years. But the sharp falls seen since the middle of summer, plunging Sterling below the symbolic $1.20 mark, have rocked import and export businesses alike, wiping out confidence amongst SME owners as they contemplate what might happen next.

Above all, it is the instability that is really biting into the trade prospects of British businesses. With no one sure if a last-minute Brexit deal will be struck or not, or what the impact of a crash-out will be, the markets are taking a cautious, if not pessimistic, view of trade with the UK, which is keeping the value of sterling depressed.

On top of that, with no one sure about what kind of trade arrangements will be in place with the EU after October 31st, supply chains are already starting to suffer disruption as future orders fall into an administrative and logistical blackhole of uncertainty.