EXPORTERS should benefit from a higher sterling because British firms buy as much from abroad as they sell, HSBC said in a report today.
Traditionally a weak pound is thought to benefit exporters because it reduces the price of their goods to overseas buyers and so makes them more competitive.
But UK manufacturers are now so plugged into the global economy that they benefit from a strong currency as it reduces the price of the supplies they buy in from overseas, HSBC said today.
“Sterling has strengthened recently, allowing businesses to buy more parts for their pound and improve productivity that way,” HSBC’s UK chief Alan Keir told City A.M. “Businesses need to be more productive to keep competitiveness with global rivals.”
Buying cheaper parts from overseas has also enabled UK firms to focus more resources domestically on research and development, the report said, improving productivity and competitiveness further.
Further investment in education will also keep UK firms ahead, the report said.