Plunge of your holiday pound: Blow for families as sterling hits lowest rate ever against euro for July getaway
- The pound is worth just 1.11 euros or 1.24 US dollars on the money markets
- Sterling has not been lower against the euro in any mid-summer since its launch
- The decline has been fuelled by fears over a No Deal exit from the EU
Families are facing the most costly foreign summer holidays for decades because of the falling pound.
Last night it was worth just 1.11 euros or 1.24 US dollars on the money markets.
Sterling has not been lower against the euro in any mid-summer since the single currency’s launch in 1999. And it is worth less against the dollar than in any late July for 50 years.
The decline has been fuelled by fears over a No Deal exit from the European Union in October.
The falling pound is worth just 1.11 euros on the money markets meaning British families are facing costly European holidays
‘It really hurts when you go abroad and holidays are so much more expensive,’ said James Daley of the consumer group Fairer Finance. ‘The fall in the pound has been one of the very tangible consequences of Brexit.
‘British holidaymakers have suffered from the uncertainty it caused for over three years now, and there’s no prospect of it getting any better very quickly.’
Holidaymakers will get even worse rates at many bureaux de change, especially at airports. Some booths offer as little as 0.8 euros to the pound, meaning £500 buys just 400 euros. Four years ago £500 would have bought nearer 700 euros.
Families trying to get away for their summer holidays have also been hit by travel chaos in the past 36 hours, with mayhem at airports caused by storms and a glitch in the air traffic control system.
Passengers were trapped on planes for as long as eight hours yesterday as hundreds of flights were severely delayed.
Sterling climbed above $2.10 in late 2007 before the financial crisis – but the following year’s meltdown triggered a decline.
The fall intensified after the European referendum was announced and on the eve of the poll sterling stood at around $1.50.
The vote to leave sparked a sharp sell-off because of fears for the future of the economy outside the EU.
Experts advise families to order travel money well in advance of departure to secure the best rates. Earlier this month Money Mail revealed that John Lewis had seen a 600 per cent rise in foreign currency sales in the past five years.
Figures from Post Office Travel Money show a sharp rise in costs across 11 popular travel destinations. Only in Bulgaria and Turkey, which has suffered a currency crisis of its own, have prices fallen.
In the Costa Del Sol, a meal which cost £29.41 in 2015 would be £59.32 now.
And in Nice on the French Riviera, the price for a bottle of beer has risen from £2.94 to £3.19. Sun cream bought on Crete now costs £6.39, up from £5.51.
Buying insect repellent in Ibiza will set travellers back £9.04 today, compared with £5.15 in 2015.
In the Costa Del Sol (pictured), a meal which cost £29.41 in 2015 would be £59.32 now due to the falling pound
These changes are not entirely due to the fall in the pound because inflation, higher wage costs and changes in the value of ingredients also play a role.
Nick Boden, head of Post Office Travel Money, said: ‘The likelihood is that the sterling exchange rate will remain unpredictable for the foreseeable future but there are destinations like Turkey where the pound still packs a punch.
‘When it comes to the eurozone, don’t assume that resort costs are the same in all destinations as our barometer research consistently reveals big variations in price.’
Holidaymakers get wildly different rates depending on where they buy their foreign money.
Debenhams was yesterday offering 1.099 euros per pound, meaning someone exchanging £500 would get 549.50 euros.
But at Southend Airport, Moneycorp was paying just 0.921 per pound – giving only 460.50 euros.
Ian Strafford-Taylor, chief executive of currency firm FairFX, said: ‘Over the last ten years we haven’t seen the pound worth less against the euro or the US dollar as the school summer holidays start than it is today.’