Most UK Companies Expect Costs, Prices to Rise as Pound Weakens - Survey

The post-Brexit referendum fall in the value of the UK pound against the US dollar and other currencies has put pressure on producers' domestic sales while boosting some companies' exports, according to the latest survey by the British Chambers of Commerce (BCC).

MOSCOW (Sputnik) — Most UK companies expect the country's depreciating currency to push prices up in 2017 as running costs increase, the latest survey by the British Chambers of Commerce (BCC) showed on Monday.

The BCC International Trade Survey indicated that the post-Brexit referendum fall in the value of the UK pound against the US dollar and other currencies has put pressure on producers' domestic sales while boosting some companies' exports.

"The survey also found that 68% of businesses expect the fall in the value of Sterling to increase their cost base in the coming year. In turn, over half (54%) of companies expect to have to increase the prices of their products and services over the next 12 months," BCC said in a statement.

So far, 44 percent of companies surveyed reported a negative impact of a cheaper pound while 25 percent of companies reported rising exports.

The survey was conducted among a sample of 1,474 manufacturing and services companies in early December.

A depreciating currency increases the costs of imports for businesses while increasing exports as their prices fall abroad. The UK pound has fallen some 15 percent against the US dollar since June's Brexit referendum in which voters chose to back withdrawal from the European Union. The pound's value remains at record lows after reversing a brief rebound when the Bank of England chose to keep its interest at 0.25 percent.