Post Brexit, UK – Switzerland Trade is Stronger than Ever

 

While Brexit has adversely impacted UK/EU trade, UK Swiss trade is better than ever. UK imports in Switzerland are up as Swiss business takes advantage of the CHF to pound sterling rate. In this post we will look in closer detail at trade between Switzerland and the UK and assess how the CHFGBP exchange rate impacts money transfers between UK and Switzerland.

UK Swiss Trade – An Overview

 

In case you have been living under a rock for the past 5 years, you are no doubt fully aware that the electorate of the United Kingdom controversially voted by referendum to leave the European Union in 2015. After much wrangling, the ‘Brexit’ formally occurred on January 1st 2020 and then the 12 month transition period ended at midnight on 31st December 2020.

 

Unsurprisingly, following Brexit UK/EU trade fell substantially and what trade remains is now more costly and complicated for both parties. As the EU was the UK’s biggest trading partner by far (accounting for 50% of all trade), this represented a huge blow for the UK economy.

However, one of the few “upsides” to Brexit is that trade between the UK and Switzerland is more buoyant than ever.

UK Imports in Switzerland

 

UK Swiss trade is bilaterally worth £35 billion annually and previous Prime Minister Boris Johnson announced in April 2022 his intentions to fast track a new, enhanced trade agreement. By far, the top UK imports in Switzerland are precious metals and pearls with pharmaceutical products a distant second.

💥🎁 Christmas & Year-End Deals On Amazon !

Don't miss out on the best discounts and top-rated products available right now!

🛒 Shop Now and Save Big Today!

*As an Amazon Associate, I earn from qualifying purchases.

As for Swiss exports into the UK organic chemicals, electrical goods and fine art all jostle for prime place and all clear the £300 million barrier.

 

With the UK economy lingering on the periphery of a recession, incoming Prime Minister Liz Truss will no doubt be hanging a lot of hope on the prospective, super-charged UK/Switzerland trade deal. That said, the UK has long ceased to be any kind of serious manufacturing powerhouse so it is not entirely clear just how much more physical good exporting can be done.

While the UK still leads the world in arms exports, the famously neutral Swiss are not exactly in the market for inter-continental missiles. Therefore it just might be that Swiss/UK goods  exports are already operating near to full power.

 

That said, both the Swiss and UK modern economies are built on the tertiary sector and especially on financial services and there are signs of ever deepening cooperation between the two nations’ financial centres.

In June 2020 (at the height of the COVID pandemic so you would be forgiven for having missed it) then Chancellor Rishi Sunak and his Swiss counterpart Federal Councillor Ueli Maurer  signed into effect the financial services “dual passport”.

What this basically means is that financial services providers in Switzerland and the UK are now able to on-board, and offer customer accounts to customers from each other’s countries.

 

It is worth keeping in mind that any trade currently taking place between the UK and Switzerland is currently benefiting from the rolled over deal that the UK inherited after leaving the EU.  To recap, while Switzerland is not part of the EU, it is part of the European Economic Area which entitles it to frictionless, duty-free trade inside the EU.

💥🎁 Christmas & Year-End Deals On Amazon !

Don't miss out on the best discounts and top-rated products available right now!

🛒 Shop Now and Save Big Today!

*As an Amazon Associate, I earn from qualifying purchases.

The rolled over UK/Swiss deal provides for tariff free trade on most goods so there are potential opportunities for UK based exporters to use the Swiss connection as a back-door to the EU’s market of 500 million potential customers.

CHFGBP – How If Affects Trade

 

Let’s now take a look at how the two nations’ currencies are performing and what this may mean for trade.

 

The Swiss Franc has long been established as one of the world’s powerhouse currencies largely on account of the vast sums of foreign currencies locked up in uber-discreet Swiss bank vaults. However, in 2022 even the Swiss France has suffered a downturn just as most other major currencies have and is now trading at 1CHF = $1.04 down from 1CHF = $1.10 at the start of the year.

That said,  the British pound has seen a much starker drop falling from £1 – $1.36 in January, to £1 – $1.14 in September.

CHF to Pound Sterling Rate

 

What this means for UK/Swiss trade, is that the pound is down against the franc as the CHFGBP tips increasingly in Switzerlands favour. Today, £1 buys 110CHF whereas the 5 years average is closer to 122 CHF. This is good news for British goods exporters whose wares are now comparatively cheap for Swiss buyers.

On the flip side, the cost of importing those luxury goods from Switzerland (the aforementioned art, fine chocolate and rolex watches) is increasing even further for those in the UK who can afford to buy them as the CHF to pound sterling rate increases.

Making A Money Transfer Between UK and Switzerland

 

💥🎁 Christmas & Year-End Deals On Amazon !

Don't miss out on the best discounts and top-rated products available right now!

🛒 Shop Now and Save Big Today!

*As an Amazon Associate, I earn from qualifying purchases.

Swiss importers with a taste for British goods may wish to use the current weakness of the pound to their advantage. By buying pound sterling now for use in future trades, Swiss businesses can essentially make the most of the current rate. Afterall, the Bank of England has signalled that it is going to raise interest rates again which they hope will jump start the beleaguered pound’s recovery.

 

On the other hand, a money transfer between UK and Switzerland is more costly. Now may well not be the optimal time for making those fund transfers between UK and Switzerland.

Swiss francs are currently unusually expensive for British businesses and many are holding off on buying currency or executing foreign exchanges and  hoping that the situation improves soon.

Final Thoughts

 

Regardless of whether or not a new trade deal can be agreed, the outlook for   UK Swiss trade is positive.  UK imports in Switzerland are increasing no doubt encouraged by the CHF to pound sterling rate.

While the pound may well rally, it seems that there is still a new normal when it comes to the CHFGBP exchange and as such, British exports to Switzerland will remain competitive for some time to come.

 

 

 

💥🎁 Christmas & Year-End Deals On Amazon !

Don't miss out on the best discounts and top-rated products available right now!

🛒 Shop Now and Save Big Today!

*As an Amazon Associate, I earn from qualifying purchases.

 

 

 

 

 

 

 

 

 

 

💥🎁 Christmas & Year-End Deals On Amazon !

Don't miss out on the best discounts and top-rated products available right now!

🛒 Shop Now and Save Big Today!

*As an Amazon Associate, I earn from qualifying purchases.

Similar Post