Slump in pound hits summer travellers in wallet

The pound yesterday slumped to a six-month low against the euro at just above €1.11 just as people start preparing for summer holidays.

Sterling was also heading for two-year lows against the dollar at below $1.25 – close to its lowest level since April 2017 – as markets reacted to continuing Brexit uncertainty and signs that the UK economy is slowing.

The downturn means travellers from the UK will getting fewer euros and dollars for their pounds.

The currency fell sharply after data showed slowing sales at UK retailers and economists forecast a contraction in the economy in the second quarter.

Sterling has been swayed by uncertainty in the aftermath of the EU referendum, but has been more stable in recent months because of confidence about the UK economy.

However, recent economic surveys have suggested that the economy may now be weakening, the BBC reported.

Jane Foley, head of foreign exchange strategy at Rabobank, said this was being factored into the market.

“The economic picture is not particularly pretty,” she said.

The pound fell 0.5% against the dollar at $1.2455, marking the lowest point for it since April 2017, excluding a brief “flash fall” in January this year.

The pound had been trading at around $1.27 in May.