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Value of Sterling on the Rise
Listed under: News
Published: Friday, August 07, 2009
Retailers affected by the falling exchange rates between the UK and America over the past year were given reason to rejoice earlier this week when it was revealed the pound's value had risen to $1.70 – up 45 cents since January.
Craft shop owners – many of whom source a large proportion of their materials from the US – have been badly affected by the pound's weakness against the dollar. Despite boasting a value of two dollars in July 2008, sterling reached its lowest US exchange rate in 23 years at the start of 2009, dropping to just $1.35.
However, Nick Bradley, head of retail and wholesale at RBS Corporate Banking UK has expressed concerns that sterling could fall back to $1.60 by the end of the month. Mr Bradley was also keen to stress that although it was highly likely that the pound's value would continue to fluctuate considerably over the next year, it would be by a much narrower amount, giving retailers “a greater degree of certainty” when ordering new stock from the US.
Retailer Lynn Everard from the Craft Box in South Yorkshire agrees the past year has been tough. “At the end of the day, it has a lot to do with the size of your business and whether or not you can afford to keep your prices constant,” she explains. “Sadly, many smaller companies simply don't have the funds to dissolve the costs and are left with no option but to pass the charges on to their customers.
“The biggest difficulty has been increasing prices on things like papers – some of which have gone from costing 60p to £1.20 in a matter of months,” she continues. “Although it isn't a massive rise, it makes a huge difference to the amount people are willing to buy and I think that is where it has affected us the most.
She adds, “It's great to hear that the value of the pound is on the rise and I hope it begins to stabilise soon, otherwise – with that and the expected VAT rise this Christmas – I'll be repricing my shelves every five minutes for the next year!”
How have the fluctuating currency rates affected your business? Email your stories to .(JavaScript must be enabled to view this email address)
Craft shop owners – many of whom source a large proportion of their materials from the US – have been badly affected by the pound's weakness against the dollar. Despite boasting a value of two dollars in July 2008, sterling reached its lowest US exchange rate in 23 years at the start of 2009, dropping to just $1.35.
However, Nick Bradley, head of retail and wholesale at RBS Corporate Banking UK has expressed concerns that sterling could fall back to $1.60 by the end of the month. Mr Bradley was also keen to stress that although it was highly likely that the pound's value would continue to fluctuate considerably over the next year, it would be by a much narrower amount, giving retailers “a greater degree of certainty” when ordering new stock from the US.
Retailer Lynn Everard from the Craft Box in South Yorkshire agrees the past year has been tough. “At the end of the day, it has a lot to do with the size of your business and whether or not you can afford to keep your prices constant,” she explains. “Sadly, many smaller companies simply don't have the funds to dissolve the costs and are left with no option but to pass the charges on to their customers.
“The biggest difficulty has been increasing prices on things like papers – some of which have gone from costing 60p to £1.20 in a matter of months,” she continues. “Although it isn't a massive rise, it makes a huge difference to the amount people are willing to buy and I think that is where it has affected us the most.
She adds, “It's great to hear that the value of the pound is on the rise and I hope it begins to stabilise soon, otherwise – with that and the expected VAT rise this Christmas – I'll be repricing my shelves every five minutes for the next year!”
How have the fluctuating currency rates affected your business? Email your stories to .(JavaScript must be enabled to view this email address)
