Extreme swings in exchange rates are forcing UK small and medium-sized enterprises (SMEs) to rethink how they manage foreign transactions, with many shifting away from the US dollar.
According to new data from independent SME funder Bibby Financial Services (BFS), 54% of UK SMEs trading overseas say they have been hit by volatile currency movements in the past year, losing an average of more than £53,000. More than half (53%) reported losses of up to £20,000, a figure that rises to 72% among the smallest firms employing fewer than ten people.
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The BFS Trading Places report, which surveyed over 500 SMEs, found that services companies have borne the brunt of recent turbulence. Nearly two-thirds (65%) of service-sector firms said they had suffered losses from FX volatility — 11 percentage points higher than the SME average.
This environment is prompting significant changes in FX management. Nearly six in 10 SMEs (58%) have revised their strategies to mitigate risk, while 59% are choosing to transact in euros or sterling to avoid exposure to dollar fluctuations. The report also highlights a pivot in trade relationships, with 60% of SMEs now focusing more heavily on European partners.
Michael McGowan, Managing Director of Bibby Foreign Exchange, warned that the risks are particularly acute for smaller firms. “Businesses are navigating a period of sustained currency volatility not seen since the Great Depression,” he said. “For SMEs trading internationally, a poorly timed transaction can significantly erode margins, leaving smaller firms especially exposed.”
The Bibby study draws on responses from more than 500 UK SME owners and decision-makers across manufacturing, construction, wholesale, transport, retail and services. The survey was carried out by independent research firm Critical Research between 15–30 May 2025.
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By GlobalDataIts release comes alongside fresh UK Trade in Numbers data from the Department for Business and Trade, which reported a 3% year-on-year increase in the value of total UK trade, reaching £1,820.2 billion in the 12 months to June 2025.
