by Hugh Morris, The Telegraph, June 9, 2017
The wallets of British holidaymakers took a hit this morning as the pound slumped at the news of a hung parliament .
Thursday's election result, which showed that Theresa May’s attempt to consolidate a Conservative majority in the House of Commons had failed, sent sterling spiralling to its lowest level against the euro in 21 weeks (€1.13), knocking two per cent off its value against the single currency.
Sterling to euro / forex one year
For Britons heading abroad this summer it means they are likely to lose some €19 for every £1,000 exchanged, according to currency analysts FairFX. Those crossing the Pond to the US will lose $23 for every £1,000, with the pound now at $1.27.
Though the value of the pound is likely to fluctuate over the coming days and weeks, it is another knock for the currency that nose-dived in the wake of the Brexit result last June.
Today FairFX said the pound had fallen by an average of two per cent against 158 currencies around the world, including those in Brazil, Canada, New Zealand, Iceland and Russia. The analysts said that the pound is now down 13 per cent against the euro compared to last June, just ahead of the EU referendum, and 14 per cent down against the dollar, a loss of €167 and $209 respectively for every £1,000 exchanged.
“Unfortunately, uncertainty is likely to characterise the coming days, weeks and months as a government is formed and Brexit negotiations start in earnest, which could lead to further currency volatility,” said Ian Strafford-Taylor, CEO of FairFX.
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Telegraph Travel’s consumer expert Nick Trend agreed. “Things are going to be unsettled,” he said. “The pound could drop further or recover.
“If you want to be sure of your budget you could buy your currency in advance, but you’d be gambling. Better to take it as it comes and make sure you get the best possible exchange rates when paying for things - cards such as Monzo offer the best rates.”
Gambling on the pound over the coming months is likely to be difficult with the asbence of opportunities for any party looking to form a stable government.
Jon Ostler, the UK CEO of Finder.com, a financial comparison website, said a hung parliament was the “worst result for confidence in currency”.
“Brexit has already added 11.9 per cent to the price of a holiday and if you’re booking travel or buying currency, hold onto your money and think about going all-inclusive,” he said.
Strafford-Taylor added: “The key is to never leave travel money until the last minute as you risk being at the mercy of the rate on the day and are more likely to miss out on the best deals.”
This article was written by Hugh Morris from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].