Pound continues fall against euro

Hotel News - 18/12/2008

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Most of the bureaux de change that travellers visit either at airports or on the high street are offering rates of less than €1 per £1.

Last year at this time, UK holidaymakers visiting the continent received €1.40 per £1. The sharp decline in the value of sterling means that all purchases, from a cup of coffee to a meal in a restaurant are costing significantly more.

A cappuccino priced at €2 at a café in Rome now costs the equivalent of £2, compared with just £1.43 if purchased last Christmas.

The latest drop in value of the pound comes as new economic data released has persuaded investors around the world to abandon the pound.

It has been reported that during a meeting a couple of weeks ago of the Bank of England’s Monetary Policy Committee, the members considered cutting interest more than the one per cent that was announced at that time.

It seems that the reason for holding back on the deeper cut was that there was fear among the members that confidence in the British economy could be further undermined by a cut of more than one per cent.

Economists are now saying, however, that is likely the Bank of England will follow the lead of the US, and cut the rate to zero.

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