Explain how a strong pound might cause pressure for Britain's manufacturing businesses?

Answer 1

It increases the costs of UK exports, making your goods more expensive for over seas markets. This also makes imports cheaper for consumers, so they are more likely to purchase foriegn goods. (so you loose at home and abroad).

Answer 2

Interesting question, with a counter-intuitive answer.

A strong pound means that it exchanges at a very favorable rate against other currencies, i.e., you get more of another currency for a smaller amount of GBP.

When British manufacturers produce goods for exporting, because the pound is so strong, it makes it more expensive for customers/markets in other countries to purchase such goods. So, if the widget is produced for GBP5, it would cost an American $10 today, rather than $7 a year ago. If the GBP was lower in value than the USD, for instance, the American could spend less than $1 to purchase the widget. Thus, if China produces the same widget, it should be ordinarily more affordable to an American than if the widget comes from the UK. Therefore, the American purchases from the Chinese since this costs less [than the British widget] in relative terms.

Invariably, British manufacturers are able to export less than they ordinarily would since the affordability of the widget is reduced by the strength of the GBP.

[That's why America keeps asking China to increase the value of their currency since it's making other countries look bad - market wise.]

Answer 3

Higher Export Prices on manufactured goods

Answer 4

If Sterling rises against, for example, the Dollar (as it has done recently), it would cost more Dollars to buy British goods.
That would make it more difficult to export to the U.S., and British manufacturers would have to drop their £ prices in order to maintain sales.