David Cameron has announced his resignation as Prime Minister following the UK’s vote to leave the EU. Britain voted for Brexit by 52% to 48%. Following the result, value of pound reached the lowest level since 1985.
With the advent of the peak travel season where thousands of tourists have planned to enjoy a vacation in Europe, is facing the dilemma about the probable effects of the ‘leave vote’. They are yet to discover the immediate changed prices in the commodities and tickets which in future will lead to further hikes.
The immediate query that is hitting the blocks is whether the holidays will cost more. The answer lies in what the value will be settled at before the referendum. According to the Treasury, the predicted sterling would lose 12-15 per cent of its value on a Leave vote. But in longer terms, the two major key rates are against the euro and the dollar.
The €:£ rate is fulcrum to all international companies including the tour operators, businesses etc. Generally, travellers prefer to visit the foreign holidays which has single-currency area. Be it Spanish Costas, Italian cities, French countryside or islands of Greece – they all have to maintain a decent €:£ rate.
According to the industry experts, the destinations in Asia and America like the US, Dubai and China will also see a proportional rise. In many cases, the currencies are locked to the US$.
How the pound price and $:£ rate is essential as it affects the oil price, aircraft costs etc. So, following a 12% fall in the sterling will push up the price of petrol, diesel and aviation fuel, as well as the cost of aircraft for airlines such as British Airways and easyJet.