UK Corporates to Increase Hedging: Survey
Posted by Colin Lambert. Last updated: December 14, 2025
Just days after releasing a survey revealing that UK funds are planning to combat increased Sterling volatility by ramping up hedging, another survey finds, unsurprisingly, that fellow hedgers, UK corporates, are planning the same.
Both surveys from MillTech polled 250 people in the respective fields and both found intent of increasing levels of hedging. The latest corporate survey finds hedging rates have risen for their third consecutive year to 78%, up from 76% in 2024 and 70% in 2023. Among firms that are not currently hedging, 68% are now considering doing so in response to market conditions.
The mean hedge ratio has also grown to 53%, up from 45% in 2024, meanwhile, hedge lengths remain elevated at 5.52 months, consistent with 5.55 months last year, but well above the 4.04 months recorded in 2023 and 4.95 in 2022.
This increased hedging activity comes as costs surge, MillTech say, noting that the average cost of hedging climbed by 66% in 2025, and 17% of corporates say their costs have more than doubled, while 92% report an overall increase.
As was also the case with the UK finds survey, manual processes dominate, and are even increasing. E-mail is now the second most common FX execution method (42%), a 10-point jump from 2024, followed by the phone (40%), up six percentage points from last year. Allied to this, limited internal expertise is the biggest challenge firms face when it comes to FX operations (29%), followed by securing credit lines (25%) and cost calculation (24%).
Somewhat bizarrely, given the preference for the phone and e-mail, the survey also finds AI adoption is accelerating, with key applications including process automation (42%), risk identification (42%), and risk management (41%).
“2025 has been a pivotal year for UK businesses as they navigate sharp swings in sterling and shifting global trade conditions,” says Eric Huttman, CEO of MillTech. “For many, there has been a realisation that staying partially or entirely unhedged carries financial risks that can no longer be ignored. Hedging has moved from a ‘nice to have’ to a fundamental part of managing currency exposure, and we’re seeing firms take a more disciplined and strategic approach as a result.
“Yet many organisations are still reliant on manual processes at a time when they need to operate with more speed and certainty,” he continues. “Looking ahead to 2026, we expect a significant shift towards smarter, more automated FX operations. The firms that embrace these tools will be better placed to act quickly, improve accuracy and protect themselves in an increasingly unpredictable market.”
The Full FX View
This survey, and the one a week or so ago by the same firm, merely serves to highlight the reactive nature of UK funds and corporates, when it comes to currency risk. It also raises the question – that has been asked in these pages before – why does it take so long for these firms to make a decision and shouldn’t they be hedging proactively?
What has always struck me about surveys like these is how the respondents complain about the cost of hedging (it’s called interest rate differential people!) and then bemoan the fact that their exposures are costing them money. It would seem a pretty simple calculation – what costs more, the hedge or the loss? If it’s the latter, start hedging!
One challenge may be something we highlighted in the earlier survey of fund managers, the lack of data and analysis thanks largely to heavily manual processes. It is the same story here with corporates.
One finding of the survey is that while 53% are very satisfied with the FX services of their primary banking partner, the most in-demand development at 26%, is a multi-bank platform offering automation. Two observations on that: Firstly, A key feature of these surveys a few years ago was the desire to increase the number of counterparties – that seems to have put aside – and secondly, what a surprise that a firm that offers a multi-bank platform has a survey that finds such a model is in demand.
This would appear to be good news for the firm concerned, however one word of caution. Given the lack of interest (or lack of understanding perhaps?) in hedging, and the increased use of manual processes, I would suggest the majority of these firms don’t care one jot about FX, so the minute things settle down (which will probably be at the exact moment they start hedging), they’ll stop!
