Only Mexico and South Africa have seen less than a 15% slump in value for sterling purchases among a basket of 20 currencies surveyed by the Post Office.
More alarmingly perhaps, the figures spell out sterling’s slump against the two key currencies of the euro and US dollar. The exchange rate against the euro has fallen 18.5% in the year to October 17, with a pound worth 1.08 on that day, while sterling was worth 21.2% less against the dollar in the same period, with a rate last Monday of $1.19.
The big winner was Mexico, whose 8.9% rise against sterling will not dent the country’s value for the vast majority of clients, while South Africa, with a 16.5% rise against sterling, is still great value at 16.6 rand to the pound, something that has prompted new flights to Cape Town this winter from British Airways and Thomas Cook.
Iceland meanwhile could end up regaining its image as an expensive destination following a 27.6% increase in the value of the krona. The country was not the biggest gainer against sterling though; the Japanese yen and Brazilian real strengthened more than 30% against the pound in the last year.
The Brazilian real was worth 3.53 to the pound on October 17, meaning that anything bought in this currency is 34% more expensive than last year. The Post Office points out, however, that the real fell significantly between 2014 and 2015, as did the Russian ruble. Compared with 2014, the Russian ruble is now 20% weaker against sterling, while the Brazilian real is worth around 1% cent less against sterling than two years ago.
The good news is that Post Office 2016 currency sales are still outperforming 2015, when sterling was far stronger. An example is the Icelandic kroner, which is one of the Post Office’s fastest growing currencies, up 18% year on year due to the rapid growth of budget flights.
Andrew Brown, head of Post Office Travel Money insisted that the weaker pound “has not dented UK holidaymakers’ appetite for travel so far”.
“There is strong evidence that holidaymakers are planning travel abroad, even to those countries whose currencies have strengthened most against sterling. For example, we have seen very strong growth in demand for the Indonesian rupiah and yet sterling has fallen 24% in value over the past year.”
