News in brief: US Federal Reserve, Christmas, SMEs

News in brief
News in brief

UK SMEs are not prepared should the US Federal Reserve hike interest rates

UK SME bosses have admitted they are not properly prepared for the US Federal Reserve to raise interest rates, with seven out of ten saying they could be better protected from currency volatility caused by a rate hike, according to the latest survey from international currency expert World First.

The survey of more than 1,000 senior decision-makers at UK-based SMEs trading overseas found that while 88% said they understood the potential impact of a US rate rise on currency markets, 70% felt their business could be better prepared to deal with exchange rate volatility. The extent of the impact- is highlighted by the fact that more than half (51%) confess that the threat posed to their business by currency risks has kept them awake at night and one in four (26%) admit to having been severely impacted by currency movements in the past.

Businesses with larger turnovers of £500m+ were the worst prepared, with 75% suggesting they could be doing more to manage their exchange rate risks, while companies with turnovers between £250,000 and £500,000 felt they were the best protected (64%).

Thousands of UK consumers send packages abroad over Christmas

Thousands of UK consumers will send packages abroad this Christmas, according to research from global money transfer firm Xpress Money. The average item makes up less than half the cost of the fully packaged and delivered parcel. With an estimated oneinfive adults sending gifts overseas this month, a huge amount of money is spent on transportation and packaging.

Millions of pounds will also be sent to families and loved ones via money transfer services during the festive period. UK banks typically charge between 5 and8% in fees and other online providers are variable. Some of these fees are less than transparent and are passed on to the recipient.

The UK is the fourth-largest international money transfer market, with outgoing funds worth an estimated £15billion. Xpress Money has been campaigning for industry regulation to reduce the vast sums of money some companies are able to charge in fees.

Xpress Money COO Sudhesh Giriyan said: “It’s astonishing how much money is evaporated by transportation costs at Christmas. Whether you’re arranging for a gift to be delivered locally or sending something direct from the UK to loved ones abroad, it’s expensive. Unfortunately, the same can be said for sending gifts of money, with the average transfer costing 7.6% in ‘delivery’ costs.”