Holidays hit as the pound falls sharply

HOLIDAYMAKERS were dealt a crippling blow yesterday after the pound tumbled sharply amid warnings it could get worse over the next few months.

The high cost of the dollar and euro will hit millions of Britons The high cost of the dollar and euro will hit millions of Britons

Families planning Easter breaks in Europe or the US already face getting 10 per cent less for their cash as fears grow over the size of Britain’s national debt.

In a dramatic day of trading, the currency fell almost one per cent to drop below the symbolic $1.50 level to $1.499 for only the second time since last May.

The slump was prompted after a shock collapse in exports and uncertainty about the outcome of a General Election sparked panic in the City. It follows another dramatic drop last week when the pound suffered its biggest fall for almost a year.

The news will hit the pockets of the two million Britons expected to fly abroad over the Easter weekend. Another 132,000 will be boarding ferries bound for Europe.

A trip that would have cost £1,000 two years ago will now cost £267 more in the US and £183 more in Europe. Experts in the UK travel industry suggested families who had not yet booked their Easter breaks should consider destinations outside the euro zone.

Mark O’Sullivan, of Currencies Direct, said: “Sterling is going to remain under pressure for the next few months and it is going to be hard for holidaymakers.

“If people are set on going abroad for their holidays we advise they go to places where the cost of living is cheap once they get there. Countries outside the EU like Turkey or Croatia.

“The exchange rates are not going to be good but at least it won’t cost them an arm and a leg once they get there.” Mike Greenacre, managing director of tour operator The Co-operative Travel, said: “The result of the weak pound is likely to be a further increase in holidays to areas such as Turkey, Egypt and North Africa.”

The fall in the value of the pound means that a bottle of beer in Paris, which cost £1.55 in March 2008, will now set British visitors back £1.90, while a night in a three-star hotel in New York has leapt from £72.50 to £99.

Travel expert Simon Calder said: “Of course it’s going to be an awful shock for lots of people who had thought they had planned all their holiday spending.

“A coffee and a croissant in an ordinary French cafe will now cost you £8. It’s awful.”

He added: “We still live in a hub of aviation and can go wherever we want but for now it might be better to stay here in Britain.”

Yesterday’s sharp drop in Sterling was prompted by the news that Britain’s trade gap had widened despite expert predicting it would narrow as overseas buyers took advantage of the weak currency.

The 6.9 per cent slump in exports in January was the sharpest drop in three years.

The disappointing figures saw the pound dip 0.75 per cent against the dollar and 0.4 per cent against the euro making £1 worth 1.10 euros.

The UK’s currency has fallen by some 24 per cent against a basket of world currencies since 2007, before the global economic crisis set in.

Sterling has now lost seven per cent against the dollar this year alone.

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