British firms reporting lift from lower pound but costs up

LONDON (AP) — The pound's slide since Britain voted to leave the European Union in June appears to be working out exactly as anticipated — while helping firms to win business from overseas, it's pushing up their costs by raising the price of imported goods.

The boon to exports has helped the survey's purchasing managers' index, a broad gauge of economic activity in the sector, stay at relatively high levels.

While, the pound's depreciation makes British exports cheaper in the international marketplace, all other things being equal, it has the potential to boost inflationary pressures in the economy by making imports more expensive.

"The downside of the weaker currency is becoming increasingly evident, however, with increased import prices leading to one of the steepest rises in purchasing costs in the near 25-year survey history," said Rob Dobson, senior economist at IHS Markit, which compiles the survey.