The pound hit its lowest level against the euro in nearly two and half years yesterday (Wednesday 29 October), as concerns grow over the UK economy and next month’s Budget.
Sterling slumped 0.4% to almost €1.13, the lowest level since April 2023. In the afternoon, sterling fluctuated between €1.13 and €1.14.
The previous day (Tuesday 28 October), the euro gained 0.5% on the pound.
A weaker pound buys fewer euros, meaning Britons travelling to countries using the currency will not get as much for their money.
The pound also weakened against the US dollar, down 0.5% at $1.32, its lowest since 1 August. It is also at its lowest against the Swiss franc and Swedish crown since the aftermath of Britain’s mini-budget crisis in 2022, Reuters reports.
Analysts said factors affecting the pound’s poor performance include the threat of higher taxes in Rachel Reeves’ Budget on 26 November and concerns about slowing economic growth.
This morning the pound/euro rate is €1.135, according to Eurochange.
Advantage Travel Partnership CEO Julia Lo Bue-Said said it is important that British holidaymakers are confident they are getting value for money in resorts.
“With the drop in the pound, I would say it’s unlikely we will see an immediate impact on holiday sales. Brits tend not to base their travel decisions on the pound’s value and package holidays, for example, offer consumers great value for money. However, the broader macro-economic pressures looming with the impending Budget could be more of a concern,” she said.
“It remains key, however, for travel destinations to demonstrate their value to British holidaymakers, given the current situation with the pound.”
