"For British exporters, the era of predictable margins is effectively over. As we settle into 2026, the compounding pressures of new trans-Atlantic trade tariffs and the erratic fluctuation of Sterling are forcing Finance Directors to tear up their old operational playbooks. In this unforgiving environment, relying on legacy banking infrastructure to handle cross-border payments is no longer just an inefficiency-it is an active threat to profitability."
"The core problem facing UK businesses isn't just the exchange rate headline figure; it is the friction and opacity involved in moving money through the traditional banking system. For decades, High Street banks have treated foreign exchange (FX) as a profit centre rather than a utility. Consider a Nottingham-based manufacturer importing components from Shenzhen or exporting services to Berlin. The "standard" bank spread of 2.5% to 3.5% on every transaction acts as a hidden tax on growth."
Predictable export margins for UK firms have disappeared because of 2026 trans-Atlantic tariffs and Sterling volatility. Legacy banks increase friction and opacity in cross-border payments by treating FX as a profit centre and charging typical spreads of 2.5–3.5%. Those spreads can erase significant amounts on large invoices, undermining negotiated gains and squeezing margins further amid supply chain inflation. Operational diversification and natural hedging, including pivoting toward the UAE, Singapore and emerging Asian markets and adopting dedicated multi-currency business accounts, reduce FX costs and help preserve export profitability.
Read at Business Matters
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