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| EU referendum: how a vote for Brexit could make clothes more expensive | |
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| With Britain on the verge of a referendum to decide whether to stay in or withdraw from the European Union, experts have speculated on what impact a Brexit could have on our economy. | With Britain on the verge of a referendum to decide whether to stay in or withdraw from the European Union, experts have speculated on what impact a Brexit could have on our economy. |
| Some have said fuel and flights will get more expensive, hurting Britons’ holidays. But there could be another unintended consequence if the British vote to leave the EU: clothes. | Some have said fuel and flights will get more expensive, hurting Britons’ holidays. But there could be another unintended consequence if the British vote to leave the EU: clothes. |
| Sterling hit its lowest against the dollar since 2009 last week and HSBC has warned a Brexit could wipe a further 20 per cent off sterling’s value. | Sterling hit its lowest against the dollar since 2009 last week and HSBC has warned a Brexit could wipe a further 20 per cent off sterling’s value. |
| Analysts said that what happens to sterling could have considerable implications for import and consumer prices. | Analysts said that what happens to sterling could have considerable implications for import and consumer prices. |
| “The cost of a weaker pound impacts all retailers, so it will be passed on to consumers,” Brun Monteyne, senior analyst at Sanford Beinstein, told the Financial Times. | “The cost of a weaker pound impacts all retailers, so it will be passed on to consumers,” Brun Monteyne, senior analyst at Sanford Beinstein, told the Financial Times. |
| A weaker pound means retailers have to spend more to buy the same amount of clothes, making those clothes more expensive for the buyer in the shops. | A weaker pound means retailers have to spend more to buy the same amount of clothes, making those clothes more expensive for the buyer in the shops. |
| British clothing and home furnishing retailers source about three-quarters of their goods from suppliers in China and south Asia, according to UBS analysts. | British clothing and home furnishing retailers source about three-quarters of their goods from suppliers in China and south Asia, according to UBS analysts. |
| Most retailers will have hedged their currency exposure for the next six to nine months, but senior retailers such as Lord Rose, M&S former executive chairman, warned prices will be affected. | Most retailers will have hedged their currency exposure for the next six to nine months, but senior retailers such as Lord Rose, M&S former executive chairman, warned prices will be affected. |
| “We know if we came out overnight there would be new tariffs. In the interim does that mean jobs and prices are affected? We believe it will,” he told Retail Week. | “We know if we came out overnight there would be new tariffs. In the interim does that mean jobs and prices are affected? We believe it will,” he told Retail Week. |
| This would be a significant change for UK buyers. Low inflation has been a boon to consumesr who experienced greater grains as there’s been little to no price hike for six years. | This would be a significant change for UK buyers. Low inflation has been a boon to consumesr who experienced greater grains as there’s been little to no price hike for six years. |
| Retailers still have the option to negotiate better suppliers and have lower input costs, Andrea Felsted argued on Bloomberg. But it might not be enough. | Retailers still have the option to negotiate better suppliers and have lower input costs, Andrea Felsted argued on Bloomberg. But it might not be enough. |
| “So renegotiation, relocation and repatriation just won't be enough: the hit from the pound's slump against the dollar has been so extreme, and Asia accounts for such a big part of British retailers' sourcing,” Felsted wrote. | “So renegotiation, relocation and repatriation just won't be enough: the hit from the pound's slump against the dollar has been so extreme, and Asia accounts for such a big part of British retailers' sourcing,” Felsted wrote. |
| A referendum to stay or withdraw from the European Union will be held on June 23. | A referendum to stay or withdraw from the European Union will be held on June 23. |
| “A vote to leave the EU would be the start, not the end, of a process. It would begin a period of uncertainty, of unknown length, and an unpredictable outcome, ” a government report has warned on Monday. | “A vote to leave the EU would be the start, not the end, of a process. It would begin a period of uncertainty, of unknown length, and an unpredictable outcome, ” a government report has warned on Monday. |
| Some companies prefer to be seen as “neutral” and said it is a matter for British people. | Some companies prefer to be seen as “neutral” and said it is a matter for British people. |
| “The referendum on EU membership is a decision for the people of Britain. Whatever that decision is, our focus will continue to be on serving customers,” Tesco said in a statement. | “The referendum on EU membership is a decision for the people of Britain. Whatever that decision is, our focus will continue to be on serving customers,” Tesco said in a statement. |