NEARLY one-third of businesses in Scotland have seen their profit margins on domestic sales hit by rising costs amid sterling weakness in the wake of the Brexit vote, a survey reveals.

The research, published today by Scottish Chambers of Commerce, also shows most companies north of the Border expect the fall in sterling to increase their costs in the coming year.

Of the Scottish businesses surveyed, 31 per cent reported that the recent devaluation of sterling was having a negative impact on domestic sales margins. The survey found 56 per cent of Scottish businesses expected the fall in the pound to increase their cost base over the next 12 months.

And 49 per cent of Scottish companies believe they will have to increase the prices of their products and services during the coming year.

In terms of export margins, 21 per cent noted a positive impact from the fall in the pound, with only three per cent reporting a negative effect.

Liz Cameron, chief executive of Scottish Chambers, said: “This research among Scottish businesses, together with our more detailed quarterly economic indicator, has revealed a clear pattern of expectations of rising costs as a result of currency fluctuations.

“In turn, this is expected to lead to increased business costs and pressures on margins, and, for many smaller businesses, there is little they feel they can do to manage currency risks.”

Separately, a survey published today by accountancy firm Grant Thornton shows the number of people working for the top 100 privately-owned limited companies in Scotland fell from about 116,284 to 110,632 in the latest year.

Grant Thornton said these employment statistics reflected the “challenging times facing the business community”. Its Scotland Ltd 2016 report is compiled using the latest publicly available accounts, as of September 1, 2016, of Scotland’s “best-performing” private businesses.