British holidaymakers visiting the Atlantic are currently facing higher prices as the pound corrodes with the US dollar, say experts. For the first time, the Sterling has gone below $1.48 since April, which translates to 14% fall as compared to $1.71 it traded in the summer of 2014. This change has changed everything as meals, hotel rooms, theme park tickets and car hire have become more expensive for British families explorers to the United States.
Consequently, the currency analysts say that the worse is yet to hit the pound as it is at a risk of hitting a 30-year low estimated at $1.30. This will raise shopping trips’ costs to the level of New York and Disneyland in Orlando, and Florida’s holidays. However, these changes will raise British’ exports to the American market as products made in British factories like cars and Scotch whisky will be more affordable to American buyers.
They recall that the last time the British pound traded at a low rate of $1.30 was the time when Margaret Thatcher was British Prime Minister, and Ronald Reagan was the president of the United States. According to David Swann, who is Travelex’s bureau de change head of pricing, the rise in US dollar means that UK holiday travelers will see their pounds’ worthless in the United States. He added to say that it is unfortunate for the British travelers who have already planned a trip to America.
Travelex said that currently £500 exchanges for $725, which is $116 lower than its value in July 2014. If the pound’s value falls to $1.30 on foreign exchange markets, then it is estimated that travelers exchanging a £500 would receive less than $650, which translates to $200 less that its value in mid-2014.
Last month the Federal Reserve increased the interest rates for the first time in almost a decade now, from 0 and 0.25 percent to 0.25 and 0.5 percent. Bank of England is claimed to be raising interest rates this year in the UK. This will increase the mortgages’ costs and other loans for residents of the UK. However, analysts have given a warning against this step saying that if Britain hikes the rates, America will get more and this will lead to the pound dropping even further.