Domestic holidays are in favour this year because foreign travel has become too expensive since a plunge in the strength of the pound, according to the Bank of England.
Weak sterling and fears about the heightened terror threat overseas have deterred holidaymakers from going abroad, the bank claimed in its monthly regional report.
At its lowest point since January, sterling had fallen almost 9% against the euro and 7% against the dollar, around half of which was down to today’s EU referendum, the Bank estimated.
The pound has since recovered much of the lost ground but economists have warned that it could collapse by another 10% to 15% after a vote to leave.
With more people choosing to stay in the country, domestic tour operators, attractions, restaurants and coffee bars have been doing a brisk trade, the Bank’s report for the second quarter said.
Low interest rates, interest-free loans and a general confidence in financial prospects have helped to encourage spending, the Times reported.
A survey by Greene King this week found that 85% of households plan to take at least one domestic holiday this year.
“UK holiday companies and visitor attractions reported increasing domestic tourism, in part reflecting perceptions of heightened threats of terrorism overseas and the depreciation of sterling, which had increased the cost of holidaying abroad,” the Bank of England agents’ report said. “Demand growth was reported to be strong at restaurants and coffee bars.
“Growth in consumer credit had remained robust, driven by low interest rates, interest-free periods on lending and confidence about personal finance prospects.”