Britain's small and medium-sized enterprises continue to drive the country's export economy, but growing international trade is placing greater emphasis on managing foreign exchange risk to protect profit margins.

Analysis by financial services firm Ebury, based on the latest official UK data, highlights the dominant role SMEs play in Britain's exporter base while warning currency volatility is becoming an increasingly important issue as more firms expand overseas.

SMEs account for 99.9% of UK private sector businesses, employing around 16.9m people and generating 51% of private sector turnover. However, only around one in nine currently exports goods or services internationally.

Department for Business and Trade figures suggest there were around 314,000 exporting SMEs in 2023, representing 11.6% of all UK SMEs. HMRC data also indicates SMEs account for around 82% of UK goods exporters, while large companies make up just 3% by number but generate most export value.

Ebury said international trade exposes businesses to exchange-rate movements, which can significantly affect profitability, particularly for smaller firms with less capacity to absorb currency fluctuations.

Phil Monkhouse, UK country manager at Ebury, commented: “As SMEs continue to grow internationally, financial resilience will become an increasingly important competitive advantage. While exchange-rate movements cannot be controlled, businesses can take proactive steps to manage their exposure and reduce uncertainty.

“The latest data serves as a reminder that Britain's small businesses are not only the backbone of the domestic economy – they are also playing a vital role in the country's international trade. Ensuring they have the tools to manage foreign exchange risk will help them compete with greater confidence in global markets.”

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