Low pound makes our holidays cost more but brings in more visitors

News Letter editorial
News Letter editorial

The fall in the value of sterling could hardly have come at a more noticeable time: the summer, when millions of Britons are changing their money to travel overseas.

The pound is particularly low against the US dollar, trading yesterday around the $1.30 mark.

Travellers get less than that after exchange rates and commission are factored in, and will receive barely better than $1.27 for any pounds that they convert.

Sterling has not fallen as heavily against the euro since Brexit, because the UK’s departure from the EU has made traders concerned about the single currency, as well as about the uncertain future of the UK economy. The exchange rate for pounds to euro, while not the worst that it has ever been, is nonetheless feeble: about €1.18 (tourists get around €1.15).

But as with interest rates, for every person or business that loses when the rate is low, there is another person or organisation that gains.

The collapse in the value of sterling in 1992 after the pound was banished from the European Exchange Rate mechanism destroyed the reputation of John Major’s government but actually was the beginning of a 15-year recovery.

A cheap pound is good for exporters. It is also good for the UK tourist industry, which we now learn has enjoyed an increase in visitors in the month following the EU referendum. Flight bookings to the UK rose 7% after Brexit drove the pound down to 31-year lows against the dollar, where it languishes.

The bookings to the UK have come mainly from Asia and the US and their arrivals will be felt in Northern Ireland, which in any event has been establishing a reputation on the international tourist trail. For much of the year it is not unusual to see long queues at popular sites such as Carrick-A-Rede.

Anything that boosts the visitor experience, from the Gobbins cliff path to the Titanic Centre to the upgrade of the A26 road to the north coast is a valuable investment in this financial environment.