Dollar Dependency Remained High for UK Businesses
UK firms largely retained dollar-denominated invoicing in H1 2026, forcing operators to manage ongoing currency exposure.
Updated on Oct. 13, 2026 in Financial Services
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The US dollar accounted for 70 percent of international payments made by UK-based iBanFirst clients during the first half of 2026, compared to 72 percent in 2025. This persistent reliance on dollar invoicing continues to expose UK businesses to significant exchange rate volatility.
Why it matters
Commercial payment habits remain resistant to change because altering currency terms requires renegotiating long-term supply contracts. Consequently, operators face continued financial risk despite broader international discussions regarding de-dollarisation.
UK businesses processed 70 percent of their international payments in US dollars during the first half of 2026, slightly down from 72 percent in 2025. With 25 percent of UK outbound payments destined for China and Hong Kong, a 1 percent shift in GBP/USD rates costs operators roughly £7,600 per $1 million.
The players
iBanFirst
An international B2B payments and currency exchange provider serving businesses globally.
The details
UK businesses often struggle to move away from dollar invoicing because foreign suppliers frequently dictate the currency terms in international contracts. To mitigate this volatility, only 20 percent of iBanFirst UK clients currently utilize FX forward payments to lock in exchange rates. As long as these supply chain dependencies exist, operators remain sensitive to fluctuations in the GBP/USD pair, which traded at approximately 1.32 as of October 13, 2026.
Timeline
• During 2025, the US dollar share of UK client payments was 72 percent.
• In the first half of 2026, the US dollar share of UK client payments fell to 70 percent.
• As of October 13, 2026, the GBP/USD exchange rate stood at approximately 1.32.
Market Landscape
While global debates regarding de-dollarisation continue, this data illustrates a stark disconnect between high-level policy rhetoric and actual commercial contracting behavior. The persistence of dollar-denominated invoicing confirms that supply chain inertia remains a primary driver of currency strategy.
Operators should evaluate their current supply contracts to identify where dollar-denominated invoicing creates unnecessary exposure to exchange rate volatility. Given that a 1 percent currency movement can result in significant cost swings, businesses may want to discuss hedging instruments or forward contracts with their finance partners.
The takeaway
Commercial contracts are often more resistant to change than macro-economic trends might suggest. Review your procurement terms to determine if you can renegotiate invoice currencies or implement hedging tools to stabilize costs against future currency fluctuations.
Further reading
For more on how shifts in currency markets impact operational costs, see our Financial Services coverage.
Source note: This article includes information reported by Financial IT.
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