Uncertainty surrounding Britain’s vote on whether to stay in or leave the EU has left small- and medium-sized British companies facing a £35.6 billion currency risk, a report said yesterday.

It is the amount of international payments potentially exposed to foreign exchange market swings because British SMEs have not committed to long-term currency contracts ahead of the June 23 referendum.

The study of 730 British SMEs by international payments firm World First and pollsters YouGov showed that, despite a 75 per cent rise in sterling volatility during the first quarter, SMEs only extended the length of their FX protection by 35 per cent.

British SMEs often protect themselves against exchange-rate volatility by locking into longer-term forward contracts. The study shows a bucking of this trend due to fears of what may happen in the referendum.

“The uncertainty around the outcome of the EU referendum has hindered SMEs’ ability to plan ahead and this is typified by indecision among SMEs when it comes to managing their currency strategies,” said Jeremy Cook, chief economist at World First.

“The fear is that by failing to hedge themselves much beyond June 23, many UK SMEs are putting themselves at the mercy of large currency swings which could be detrimental to their business and the wider economy.”

The report also showed that 31 per cent of firms were worried about the impact uncertainty could have on their business; 55 per cent thought that sterling will remain be volatile in Q2; and 13 per cent predicted it will be very volatile.