Chris Saint, of Bristol-based financial advisors Hargreaves Lansdown, says: “Sterling has lost 6.5 per cent of its value against the dollar since January 1, with the pound now around $1.52, against $1.62 at the start of the year. This scale of decline, which dealers expected over the entire year, has happened in only seven weeks! There is every possibility of a $1.40 pound before long, as we head towards the depths of the $1.35 rate of early-2009.”
The warning comes as tour operator Jet2holidays put New York flights and shopping breaks on sale from five UK airports in the run-up to Christmas 2013, with return flights from £439 and three-night packages from £699.
Trips to the city that never sleeps are available between November 17 and December 15 from Glasgow, Newcastle, Leeds Bradford, East Midlands and from Manchester for the first time this year. The packages with Jet2holidays require only a £60 per person deposit.
Steve Heapy, chief executive at Jet2.com and Jet2holidays, says: “Our New York trips are extremely popular, so we extended them to include Manchester this year.
“We’ve put New York on sale even earlier this year to help people to manage finances carefully and to ensure they have plenty of dollars left to spend on all the must-see and do activities in this amazing city.”
However, Saint says tour operators might be able to shield British visitors to the States against the pain of the plunging pound if they hedged currency requirements back in late-2012 and effectively locked in a favourable exchange rate to secure rooms at reasonable prices.
Travellers who book their own flights and arrange accommodation might not enjoy the same protection.
Few currency experts are very optimistic about the future for sterling.
Brian Jackson, global foreign exchange specialist at Coutts, says it is likely to take a further pounding. “The lack of plausible domestic sources of support for UK growth makes it more likely that sterling will keep falling. We see scope for some correction after the recent sharp losses, and sterling perhaps falling to around $1.50 by mid year, before stabilising around $1.48 from the end of the third quarter into the end of the year (against our previous end-year forecast of $1.54).”
In Europe, the pound will stabilise in the 87-89p range this year, Coutts predicts.
David Swann at Travelex says: “Those willing to look at alternative destinations could get more for their holiday pounds: Japan, South Africa and Brazil all currently provide great value for money.”