LONDON Oct 14 Britain's vote to leave the
European Union sparked a doubling of currency hedging by small
UK businesses, with more than half now using forward or options
contracts to protect themselves from moves in the pound,
industry research showed on Friday.
The anonymous poll of more than 1,100 companies by banking
researchers East & Partners, conducted in August, showed 57.4
percent of small- and medium-sized businesses had used hedging
products, compared with around a quarter before the Brexit vote
Use among smaller micro businesses also rose, to 57.5
percent, from less than a fifth before the referendum, East &
"The staggering increase in the use of FX hedging products
by UK small business in the summer period just after the Leave
Vote shows a lesson has quickly been learnt for a big part of
British business," said Simon Kleine, the researcher's head of
client services for Europe.
Sterling sank by around 10 percent in value immediately
after the vote in June and another round of selling in the past
three weeks has brought its losses to almost 20 percent in total
A "flash crash" last Friday added to broader concerns about
the stability of the currency in the face of Britain's huge
current account deficit, and the threat to foreign investment
generated by negotiations with Brussels.
(Editing by Larry King)