Falling Pound threatens British companies with inflation

             

London - British corporations are losing the battle against the forces of inflation advancing since the triumph of Brexit in the vote in June.

As the pound reaches new record minimum values ​​- a fact that increases the cost of imports as South African blueberries and Italian plumbing - the cost of protection against further currency declines are rising too.

The dilemma for traders: the transfer cost or support prices that erode profits.

Take the example of Sofia Charalambous, which sells faucets, mirrors and soap dispensers in your company, Bathroom Origins, based in Romford, England.

The 50,000 pounds in euros that she bought with currency futures contracts before the UK decided to leave the European Union, they have been exhausted.

Now she has to pay the French suppliers, Italian and Spanish in pounds worth 15 percent less against the euro, and it is preparing to raise prices.

"We are in a complicated situation because we do not know how to quote the pound," said Charalambous. "We have no idea what's going on."

Sports Direct

Not only small companies like Bathroom Origins, with about 1 million pounds in annual sales, were affected by the sharp fall of the pound after Brexit.

The network of sporting goods Sports Direct International said last week that losses on its foreign coverage after a "flash crash" of the pound could decrease results in up to 35 million pounds.

Movements in exchange rates cost the airline EasyJet, based in the United Kingdom, about 90 million pounds in the 12 months ended on 30 September.

Products Unilever, Hellmann's mayonnaise and Ben & Jerry's ice cream and even Marmite, a paste made from yeast extract, are gone Tesco's online store on Wednesday, after the release of a dispute over a price increase linked to the weakness of the pound.

The pound fell against the 31 other important currencies since the triumph of Brexit and are about to register the steepest annual decline since the 2008 financial crisis.

Losses accelerated this month amid concern that Prime Minister Theresa May put at risk access to the EU common market to ensure greater control over immigration.

The pound recovered some of the lost territory on Wednesday, when May said he would allow Parliament debating the government's plans to exit the block, but the rally lost steam on Thursday.

High

Down 20 percent in the pound could cause a 12 percent to 13 percent in import prices in the United Kingdom and increase consumer prices on an additional 4 percentage points in three or four years, said Michael Saunders, a member of the Monetary Policy Committee of the Bank of England.

"Many companies are protected against the potential of a Brexit, but they acquire short term and many covers are now ending. When they try to buy them again, they are very expensive, "said James Garvey, director of capital markets at Lloyds Bank in a conference at Bloomberg in London on Wednesday.