by DAVID BROUGH –
The UK’s jewellers, many of whom import diamonds and gemstones processed in India, are facing painful challenges due to a rapidly evolving financial crisis following sweeping tax cuts in a 23rd September “mini-budget” that set off a slide in the pound to a record low against the US dollar.
Much of the UK jewellery sector is dependent on imports of precious materials, such as gold, silver, and platinum, as well as diamonds and coloured gemstones, all of which are denominated in dollars.
The UK is a significant importer of diamonds and gemstones processed in centres such as Surat and Jaipur, as well as of Indian manufactured and handcrafted jewellery.
The sharp fall in the pound has impacted jewellers replenishing their stocks of such materials, hitting their margins.
Despite the fall in gold prices to a 2-1/2-year low in dollar terms in late September, the yellow metal is still expensive in pounds.
“We are astonished by how much the prices of raw materials have risen,” said Jaysal Pattni of London-based Minar Jewellers.
A huge priority facing UK jewellers is how to tackle the impact of high inflation on their businesses, with customers facing surging energy and food costs.