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Falling pound prices families out of American holidays

Pound Sterling US Dollar Holiday USA United States
Pound Sterling US Dollar Holiday USA United States

Families will be forced to spend a fifth more on American holidays after the pound fell to an all-time low against the US dollar.

Holidaymakers planning a half-term or Christmas getaway to the US will be stung with surging costs amid predictions sterling could slump to parity with the dollar by the end of the year unless the Bank of England takes urgent action to restore confidence.

The pound plummeted almost 5pc to as low as $1.03 in overnight trading, taking it to the weakest since decimalisation in 1971. Sterling has gained some ground today, but experts have warned trips abroad have become significantly more expensive.

The pound has steadily declined this summer and exchange rates today are 17pc lower than at the beginning of the Easter holidays. It means families planning on a half-term trip to the US this month will be £210 worse off for every £1,000 exchanged into dollars, according to analysis by currency exchange service FairFX.

The calculation is based on the exchange rate at 1.05 this morning, compared with 1.27 on April 11.

Jack Mitchell, of the company, said low exchange rates would be a “huge blow” for anyone heading to the US in the coming weeks.

Mr Mitchell said: “Not only does it mean fewer dollars in your pocket when you exchange cash ahead of your trip, but the value of the pound plunging against the dollar means your money won’t stretch as far when you’re abroad.

“And amid rising costs, inflation and ongoing economic uncertainty, travellers should be warned that rates may well remain at this level.”

The cost of dining out and excursions while on holiday in the US has risen by a fifth since Easter half term.

It will now cost a family of four £292 to visit three of New York’s most popular attractions – the Statue of Liberty, the Top of the Rock observatory on top of the Rockefeller Center and the Metropolitan Museum of Art – up from £242 in April and a jump of 21pc.

Even a classic New York Reuben sandwich at the iconic Katz's Deli will cost 20pc more today, rising from £21 to £25.50 thanks to the abysmal exchange rate.

The cost of three meals a day, plus 20pc tips, at some of the most popular restaurants in the city for two adults and two children has also risen by a fifth, up from £369 in April to £447 this month.

There are some steps travellers can take to reduce their outgoings, such as spending on specialist travel bank cards. Changing travel money at the last minute can be very costly. Exchange rates at airports can be more than 20pc more expensive, equivalent to you losing £200 of cash for every £1,000 exchanged.

Travellers arriving in major London stations are being offered a worse deal than the prevailing market rate, The Telegraph found.

Exchange services in Victoria railway station offered $1.04 to the pound to consumers buying currency, while one service in St Pancras International offered $0.87 cents to the pound.