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UK firms keeping their cash close to home

An increasing number of UK SMEs are purchasing their stock from within the Eurozone, according to a report.

The average number of purchases from within the Eurozone during the first three months of 2011 was up 18% on the previous quarter, according to Foreign exchange company Caxton FX.

With the world facing a number of huge crises recently, from natural disasters and political unrest to the global financial meltdown of the past two years, the firm believes that this is leading to people keeping their money closer to home.

Rupert Lee-Browne, CEO of Caxton FX, said: “The eurozone accounts for over half of the UK’s foreign trade.

“Since the start of the year there has been a significant 18% increase in UK firms importing from the eurozone.

“With all the global difficulties over the past few months, UK businesses - SMEs in particular - appear to be putting their trust in the eurozone, and spending their money nearer to home.”

They believe that with the disaster in Japan and the political unrest in the Middle East this trend seems likely to continue into the coming months.

He said: “It is unlikely that fluctuations in the currency market have had a huge influence on the figure, as sterling hasn’t been strong enough against the euro to justify an increase in investment. It appears to be more a case of businesses putting their money where they can see it.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .