Tips for holiday-makers as the pound slumps against US Dollar and Euro
Video report by ITV News Consumer Editor Chris Choi
The pound’s plunge on no-deal Brexit fears has come at a terrible time for British holidaymakers as many head abroad over the summer.
Sterling has tumbled after new Prime Minister Boris Johnson and his cabinet took a hardline stance on negotiations with the EU over Brexit.
Cabinet minister Michael Gove wrote in the Sunday Times that a “no-deal is now a very real prospect” and the Government is “working on the assumption” of a no-deal Brexit, which sparked a hefty fall in the value of the pound on Monday, with no let-up in the declines on Tuesday.
Mr Johnson has since insisted he will “go the extra thousand miles” to secure a deal, but with just two months to go until the October 31 Brexit deadline, many believe he has set the UK on course for a cliff-edge Brexit.
It spells bad news for British holidaymakers heading abroad,with the Brexit-hit pound leading to rock-bottom exchange rates.
Tips for holiday-makers to exchange money
Travel Writer Simon Calder advises holiday-makers to buy some currency now and the rest at a later date.
He told ITV News: “If you want to have some kind of insurance then buy some now in case the pound sinks even further and then the rest shortly before you go.”
Mr Calder suggested buying US Dollars and Euros from the UK and said it’s often best to buy online and collect from a foreign exchange bureau.
Buyers will get a competitive rate as long as they buy in advance, he said.
“For anything else – two very popular currencies this time of year, the Croatian Kuna and the Turkish Lira – don’t even think about buying them here, you will get a terrible rate,” he added.
“Wait until you get there, you can’t move for foreign exchange places who will give you a very good rate of exchange.”
Jasmine Birtles recommends a pre-pay card - such as one available at the Post Office - which you can load with Euros or US Dollars.
Even if the rate drops from the time the card is loaded, the amount will not change.
She added: "Don't get your money at the airport unless you booked it before online.
"The best thing really is to shop around online and at exchange bureaus."
Banks are the obvious place to go to for money, she said, but there are alternatives.
"You can go to department stores, supermarkets and also the new digital banks have really good rates and no commission abroad," she said.
Where can you still get good value for the pound?
Johanne Leahy, campaigns director at the Post Office, assured there are still destinations where the pound can buy good value.
She told ITV News: "You can make your pound stretch by choosing the destination, both according to where you can get the best value for the currency, but also doing your research and looking at the costs on the ground because local costs can make a huge difference to how far your pound can stretch.
"For example, if you look at the cost in the Algarve year over year they have reduced by 28%, and then by comparison in the Costa Del Sol they have actually increased by 30%. So there is money to be made and lost."
In Turkey, the Sterling is performing 6% better than the Turkish Lira compared to last summer. In Iceland, too, the pound can get 7% more.
Mr Calder's tip is to consider Poland and the Baltic Riviera or Bulgaria.
What happened to the pound?
The pound has fallen to a two-year low against the US Dollar and slumped against the Euro as fears over a no-deal Brexit grow.
Experts said sterling was now on track for its worst month since October 2016, having tumbled more than 4% since the end of June.
On April 15 buyers could get €579 for £500 but today that would get €546 Euro - a difference of $33.
On the same day, £500 would buy $655 - but that would now buy $608, which is a difference of $47.
One pound is now equal to just €1.09 or $1.21, though the rates at an airport are almost certain to be even lower.
This means that travellers to Europe will find their pound does not go very far while they will also get a poor dollar rate if they are going to the US or countries where the greenback is the main currency – hiking up the cost of everything from accommodation to food.
Nigel Green, founder and CEO of financial advisory firm deVere Group, said the falling pound will have an impact on holidaymakers wherever they travel.
He said: “Even destinations such as Dubai and China are more expensive as their currencies are pegged to the US dollar.”
“Overall, the pound is the worst-performing major currency in the last three months, meaning almost every destination is now more expensive than it was for Brits,” he added.
Andy Smith, who often travels to Florida for family holidays, told ITV News he has had to save more money for the amount of dollars he needs.
He said: "In 2007 it was $2 to £1, so a meal that cost you for example $10 was £5 and now it's about £8 and it doesn't sound like much in one meal but when you multiply it over the cost of a holiday it makes a huge difference."
"If we bought for example £2,000 in currency the difference is £300/£400 at least if not more and then it's not just currency, it's the value of when you're buying things in the US and in Europe," he added.
News of a weakening sterling comes after the CBI warned today businesses aren’t ready and Vauxhall said it could lead to the closure of its car factory in Ellesmere Port.
Where can I go for more information on travel money?