The success of the left wing party, Syriza, in Greece has sent the euro tumbling against the pound.
The pound is now worth €1.337 compared to €1.25 only eight weeks ago. This is not good news for companies exporting their products to countries within the Eurozone, but it is good news for all of us planning on spending some time on the continent this summer. European holidays now offer the best value for money in over a decade.
Eighteen months ago during the summer of 2013, the cost of buying €500 was £440. Today, €500 only costs £375 to buy, 15 per cent less than it was in 2013.
If you are thinking of a holiday in the USA, however, your holiday money will be more expensive to buy. The dollar has done even better against the euro and, consequently, has gone up against sterling too. In July 2014, for every £1, you could buy $1.71. Today, £1 will buy you just $1.51, a fall of 12 per cent. In fact, a holiday in the USA is currently at its most expensive in four years.
If you are concerned that the euro might recover some ground between now and this summer, you could lock into the current exchange rate by buying a pre-paid currency card. However, it is not guaranteed that the euro will recover; it could, of course, fall further. The euro was much weaker ten years ago. For a short period of time in 2004, £1 would buy €1.5 and the pound was worth 1.4 euros for many months before the financial crash of 2008.
If a holiday in Spain or France isn’t enough for you, buying a holiday home in a Eurozone country is a much more attractive prospect than it has been for some time. A €100,000 property in Spain will cost £75,000 today as opposed to £90,000 in 2012.
