Putting up prices after Brexit - any tips?
Discussion
Maybe I'm an optimist, but I still think this volatility is short term.
It can be said that the £ was over valued a little pre Brexit but I can see no reason for it dropping to parity with the Euro, let alone the $.
The trouble with currency is the fact that there are traders making money out of fluctuations. If they don't move there is little cash to be made. Big movements allow for big profits (and losses) for dealers and institutions. The rest of us are no concern to them!
So far nothing has really changed in the UK. We are still part of the EU and continuing to pay part of their bills. Everything else is speculation.
It can be said that the £ was over valued a little pre Brexit but I can see no reason for it dropping to parity with the Euro, let alone the $.
The trouble with currency is the fact that there are traders making money out of fluctuations. If they don't move there is little cash to be made. Big movements allow for big profits (and losses) for dealers and institutions. The rest of us are no concern to them!
So far nothing has really changed in the UK. We are still part of the EU and continuing to pay part of their bills. Everything else is speculation.
Storer said:
Maybe I'm an optimist, but I still think this volatility is short term.
It can be said that the £ was over valued a little pre Brexit but I can see no reason for it dropping to parity with the Euro, let alone the $.
The trouble with currency is the fact that there are traders making money out of fluctuations. If they don't move there is little cash to be made. Big movements allow for big profits (and losses) for dealers and institutions. The rest of us are no concern to them!
So far nothing has really changed in the UK. We are still part of the EU and continuing to pay part of their bills. Everything else is speculation.
There's not a huge amount of volatility - just a downwards trend It can be said that the £ was over valued a little pre Brexit but I can see no reason for it dropping to parity with the Euro, let alone the $.
The trouble with currency is the fact that there are traders making money out of fluctuations. If they don't move there is little cash to be made. Big movements allow for big profits (and losses) for dealers and institutions. The rest of us are no concern to them!
So far nothing has really changed in the UK. We are still part of the EU and continuing to pay part of their bills. Everything else is speculation.
Both businesses in the units next to mine are really feeling it.
One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
NinjaPower said:
Both businesses in the units next to mine are really feeling it.
One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
I hope to be proved entirely wrong, but it's going to get worse before it gets better.One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
NinjaPower said:
Both businesses in the units next to mine are really feeling it.
One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
It could be said that both of those products could (and maybe should) be produced here from raw timber. One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
One of our problems is that we import finished products that we could produce here from either home grown or imported raw materials. Both of those wood products can be produced using high levels of mechanisation to computer controlled accuracy.
In the past our inflated currency has made importing goods cheap and easy and exporting less competitive.
As a business owner that produces a commodity which is traded in $ worldwide, the devaluation is welcome, and I suspect other UK exporting businesses will feel the same.
The changes the UK is going to go through will see winners and losers. Hopefully we will see the loss of call centres, and the like replaced by the rise of useful, productive jobs.
The Moose said:
NinjaPower said:
Both businesses in the units next to mine are really feeling it.
One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
I hope to be proved entirely wrong, but it's going to get worse before it gets better.One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
Storer said:
It could be said that both of those products could (and maybe should) be produced here from raw timber.
One of our problems is that we import finished products that we could produce here from either home grown or imported raw materials. Both of those wood products can be produced using high levels of mechanisation to computer controlled accuracy.
In the past our inflated currency has made importing goods cheap and easy and exporting less competitive.
As a business owner that produces a commodity which is traded in $ worldwide, the devaluation is welcome, and I suspect other UK exporting businesses will feel the same.
The changes the UK is going to go through will see winners and losers. Hopefully we will see the loss of call centres, and the like replaced by the rise of useful, productive jobs.
It's not necessarily a bad thing to import stuff. Why? Because other countries tend to make a lot of things much, much cheaper. This leaves the UK free to pursue its competitive advantages while paying peanuts for the commodities it needs. I'm not accusing you of this stance but for example, how many times did I hear people say we should be digging up our own coal instead of importing it during the pre-brexit debate? A painful number of times anyway. They clearly don't realise that to achieve their ambitions it's a case of either multiplying the retail price of this commodity which requires a whole bunch of fairly unskilled labour to dig up in pretty poor conditions or paying people £2 an hour or less to do it in this country. Overall, it's insane to encourage the price of imports to go up when you're a significant net importer like the U.K. I believe it's going to turrn out to be a bad thing, moreso if we don't secure access to the single market. One of our problems is that we import finished products that we could produce here from either home grown or imported raw materials. Both of those wood products can be produced using high levels of mechanisation to computer controlled accuracy.
In the past our inflated currency has made importing goods cheap and easy and exporting less competitive.
As a business owner that produces a commodity which is traded in $ worldwide, the devaluation is welcome, and I suspect other UK exporting businesses will feel the same.
The changes the UK is going to go through will see winners and losers. Hopefully we will see the loss of call centres, and the like replaced by the rise of useful, productive jobs.
There's talk of all these trade deals (rather notably people applauding the prospect of free trade with China right after complaining about them destroying our steel industry!) but if the EU starts to develop more competing industries against the U.K. which then leads to serious competition against the UK for Asian trade or American trade on the basis of currency valuations, this might put U.K. Companies in a perilous position at some point in future even though exporting companies are seeing a rosey picture now.
Forgive my ramblings, I'm seeing an awful lot more bad than good happening and poised to happen right now.
davepoth said:
The Moose said:
NinjaPower said:
Both businesses in the units next to mine are really feeling it.
One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
I hope to be proved entirely wrong, but it's going to get worse before it gets better.One imports container loads of solid wood furniture to sell in his showroom, and because he buys in dollars, his profit margin has been kicked squarely in the nuts.
The other guy imports engineered wood flooring, also by the container load, and is also now suffering.
They now both tell me they would cheerfully spit in the face of anyone who voted for Brexit.
Given that, there will be much more pain overall. Not only that, but when the imports are consumed so vastly by all in our country for pretty essential items (such as fuel, large chunks of food etc), there will be a lot of people feeling the pinch.
Add into that the fact that supposedly there are 16 million people (if my memory serves me correctly) who have less than £100 in savings, it doesn't paint a pretty picture for us as a country moving forward.
As you quoted, I do hope to be proved entirely wrong.
Storer said:
It could be said that both of those products could (and maybe should) be produced here from raw timber.
One of our problems is that we import finished products that we could produce here from either home grown or imported raw materials. Both of those wood products can be produced using high levels of mechanisation to computer controlled accuracy.
In the past our inflated currency has made importing goods cheap and easy and exporting less competitive.
As a business owner that produces a commodity which is traded in $ worldwide, the devaluation is welcome, and I suspect other UK exporting businesses will feel the same.
The changes the UK is going to go through will see winners and losers. Hopefully we will see the loss of call centres, and the like replaced by the rise of useful, productive jobs.
The problem is that you couldn't produce products like those in the UK and them still be a price that was either attractive or even affordable for the consumer. It just doesn't work.One of our problems is that we import finished products that we could produce here from either home grown or imported raw materials. Both of those wood products can be produced using high levels of mechanisation to computer controlled accuracy.
In the past our inflated currency has made importing goods cheap and easy and exporting less competitive.
As a business owner that produces a commodity which is traded in $ worldwide, the devaluation is welcome, and I suspect other UK exporting businesses will feel the same.
The changes the UK is going to go through will see winners and losers. Hopefully we will see the loss of call centres, and the like replaced by the rise of useful, productive jobs.
As for your comment on call centres, I can't see your logic. If a business is useful to someone, employing people and that business is making a profit, what's the problem? Surely it would be far worse to have that business outside the country. Unless of course you just want everyone to work in a metal bashing factory for no apparent reason?
NinjaPower said:
The problem is that you couldn't produce products like those in the UK and them still be a price that was either attractive or even affordable for the consumer. It just doesn't work.
I don't agree with this.Take engineered flooring, for example.
Orlestone Oak make their own at the same price as many of the retailers on Google.
http://www.orlestoneoakflooring.co.uk/Engineered_O...
Whilst I agree we are likely to import inflation for some goods we can't make, we are also likely to see a resurgence of home grown manufacturing.
The Moose said:
As I understand it (and I could well be incorrect), as a nation, or perhaps more importantly as a currency, we are a net importer - i.e. we bring in much more than we send out. Also as I understand it, this is by some substantial margin.
Given that, there will be much more pain overall. Not only that, but when the imports are consumed so vastly by all in our country for pretty essential items (such as fuel, large chunks of food etc), there will be a lot of people feeling the pinch.
Add into that the fact that supposedly there are 16 million people (if my memory serves me correctly) who have less than £100 in savings, it doesn't paint a pretty picture for us as a country moving forward.
As you quoted, I do hope to be proved entirely wrong.
Ok a bit of clarification. We, the UK, have historically imported on average about 7% more than we export in GBP terms over the past 10 years. It varies from about 5% to 10%. So the difference is quite small. Surprisingly, between Q3 2007 and Q1 2009, when the GBP depreciated by 25% against its major trading currencies, the trade deficit remained stable. This should have boosted exports and made imports more expensive, but it didnt. For those interested in possible reasons why...please read the government paper (yawn): http://webarchive.nationalarchives.gov.uk/20160105...Given that, there will be much more pain overall. Not only that, but when the imports are consumed so vastly by all in our country for pretty essential items (such as fuel, large chunks of food etc), there will be a lot of people feeling the pinch.
Add into that the fact that supposedly there are 16 million people (if my memory serves me correctly) who have less than £100 in savings, it doesn't paint a pretty picture for us as a country moving forward.
As you quoted, I do hope to be proved entirely wrong.
In August's trade balance data for the UK, exports remained flat versus July but imports rose quite sharply. All this despite the weak currency, when the opposite should have happened. Economic theory...not always right.
loafer123 said:
NinjaPower said:
The problem is that you couldn't produce products like those in the UK and them still be a price that was either attractive or even affordable for the consumer. It just doesn't work.
I don't agree with this.Take engineered flooring, for example.
Orlestone Oak make their own at the same price as many of the retailers on Google.
http://www.orlestoneoakflooring.co.uk/Engineered_O...
Whilst I agree we are likely to import inflation for some goods we can't make, we are also likely to see a resurgence of home grown manufacturing.
coal, oil, food, run of the mill cars (VW would be a good example), car parts, medicines, plastics, steel, batteries, washing machines, fish, electronics or indeed the majority of manufacturing inputs?
This isn't even to mention the potential threat of having to have customs officers checking items coming into the UK or to have to fill in CN22's for every sale leaving the country.
We work in an industry where prices always fluctuate, mainly with the exchange rate but also other factors so we have been increasing our costs since shortly after the BREXIT vote, it is a levgel playing field as most of our competitors have had to do the same.
Certain products held in high volume in the UK have yet to increase as they would have been bought months ago, the downside to this is when they do increase the jump will possibly be much bigger.
Some suppliers have increased prices across the board, our industry is known for very low margins so I can't really blame them.
Certain products held in high volume in the UK have yet to increase as they would have been bought months ago, the downside to this is when they do increase the jump will possibly be much bigger.
Some suppliers have increased prices across the board, our industry is known for very low margins so I can't really blame them.
GT2CS said:
The Moose said:
As I understand it (and I could well be incorrect), as a nation, or perhaps more importantly as a currency, we are a net importer - i.e. we bring in much more than we send out. Also as I understand it, this is by some substantial margin.
Given that, there will be much more pain overall. Not only that, but when the imports are consumed so vastly by all in our country for pretty essential items (such as fuel, large chunks of food etc), there will be a lot of people feeling the pinch.
Add into that the fact that supposedly there are 16 million people (if my memory serves me correctly) who have less than £100 in savings, it doesn't paint a pretty picture for us as a country moving forward.
As you quoted, I do hope to be proved entirely wrong.
Ok a bit of clarification. We, the UK, have historically imported on average about 7% more than we export in GBP terms over the past 10 years. It varies from about 5% to 10%. So the difference is quite small. Surprisingly, between Q3 2007 and Q1 2009, when the GBP depreciated by 25% against its major trading currencies, the trade deficit remained stable. This should have boosted exports and made imports more expensive, but it didnt. For those interested in possible reasons why...please read the government paper (yawn): http://webarchive.nationalarchives.gov.uk/20160105...Given that, there will be much more pain overall. Not only that, but when the imports are consumed so vastly by all in our country for pretty essential items (such as fuel, large chunks of food etc), there will be a lot of people feeling the pinch.
Add into that the fact that supposedly there are 16 million people (if my memory serves me correctly) who have less than £100 in savings, it doesn't paint a pretty picture for us as a country moving forward.
As you quoted, I do hope to be proved entirely wrong.
In August's trade balance data for the UK, exports remained flat versus July but imports rose quite sharply. All this despite the weak currency, when the opposite should have happened. Economic theory...not always right.
In fact, for 2004 - 2014 I found the following data:
| Year | Exports ($B) | Imports ($B) | Deficit ($B) |
|---|---|---|---|
| 2004 | 323 | 458 | 135 |
| 2005 | 351 | 486 | 135 |
| 2006 | 381 | 547 | 166 |
| 2007 | 424 | 611 | 187 |
| 2008 | 455 | 634 | 179 |
| 2009 | 339 | 490 | 151 |
| 2010 | 384 | 559 | 175 |
| 2011 | 447 | 649 | 202 |
| 2012 | 436 | 616 | 180 |
| 2013 | 453 | 628 | 175 |
| 2014 | 472 | 663 | 191 |
Am I missing something as the difference there for all 10 years is a touch greater than 7%?
Edited by The Moose on Tuesday 11th October 19:32
The Moose said:
The latest figures I can quickly find are for 2014. Show us exporting $472B and importing $663B.
In fact, for 2004 - 2014 I found the following data:
Am I missing something as the difference there for all 10 years is a touch greater than 7%?
Who knows - but the fact that deficit is spelt pretty similar to defecate might send a warning signal and that they are in $!!In fact, for 2004 - 2014 I found the following data:
| Year | Exports ($B) | Imports ($B) | Defecit ($B) |
|---|---|---|---|
| 2004 | 323 | 458 | 135 |
| 2005 | 351 | 486 | 135 |
| 2006 | 381 | 547 | 166 |
| 2007 | 424 | 611 | 187 |
| 2008 | 455 | 634 | 179 |
| 2009 | 339 | 490 | 151 |
| 2010 | 384 | 559 | 175 |
| 2011 | 447 | 649 | 202 |
| 2012 | 436 | 616 | 180 |
| 2013 | 453 | 628 | 175 |
| 2014 | 472 | 663 | 191 |
Am I missing something as the difference there for all 10 years is a touch greater than 7%?
Demand for dirt cheap products supplied by suppliers with tight margins was never going to end well.
The desire from the British public for cheaper and cheaper has never been so strong. Even if it puts british business out of business, even if products are made by kids or effective slaves who cares as long as it's cheap and matey gets what he wants.
Same thing happens in the building trade, it's as if people literally care about nothing but themselves today right now, tomorrow is no concern, who cares if the bloke building the wall goes bust, who cares if his earnings only cover his costs, I want a wall and I want it cheap.
I'm not in an import export type job but some of the margins I see/hear just sound so borderline dangerous is incredible tbh. Every time I've ever looked at something to import it looks like only a minor problem has to occur and then all profit is wiped out or you've got to sell a thousand a day of something to make ends meet.
The desire from the British public for cheaper and cheaper has never been so strong. Even if it puts british business out of business, even if products are made by kids or effective slaves who cares as long as it's cheap and matey gets what he wants.
Same thing happens in the building trade, it's as if people literally care about nothing but themselves today right now, tomorrow is no concern, who cares if the bloke building the wall goes bust, who cares if his earnings only cover his costs, I want a wall and I want it cheap.
I'm not in an import export type job but some of the margins I see/hear just sound so borderline dangerous is incredible tbh. Every time I've ever looked at something to import it looks like only a minor problem has to occur and then all profit is wiped out or you've got to sell a thousand a day of something to make ends meet.
Think you have to take goods and services in to account. If you take just goods we run a large deficit, but because we have a very large financial services sector this counts as exports and boosts the overall figure. We still run a deficit overall, running at an average £3bn odd per month.
http://www.tradingeconomics.com/united-kingdom/bal...
http://www.tradingeconomics.com/united-kingdom/bal...
GT2CS said:
Think you have to take goods and services in to account. If you take just goods we run a large deficit, but because we have a very large financial services sector this counts as exports and boosts the overall figure. We still run a deficit overall, running at an average £3bn odd per month.
http://www.tradingeconomics.com/united-kingdom/bal...
A huge portion of which are based here in London purely due to the financial passporting regulations within the EU. Fingers crossed we don't lose those rights...otherwise the financial services industry will likely not be able to prop up our economy as it has.http://www.tradingeconomics.com/united-kingdom/bal...
There's not really a good end to the current situation. Banks, Business and Politicians all wanted to Remain. The Exchange Rates are essentially set directly by "Banks" and indirectly by Government. Whether rightly or wrongly there will be emotion involved and likely the rate will be pushed lower than it perhaps should be based on cold hard logic. That means the banks then have a direct interest in the rate fitting to their position rather than moving back towards the middle, so the UK will be stuffed. And if the rate doesn't move, the banks will be stuffed and need another bailout so again the UK will be stuffed.
Either way, the UK is stuffed ...
Either way, the UK is stuffed ...
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