Pound falls to record low against euro

Thursday, 11 December 2008 01:00

Sterling has fallen to a new low against the euro amid fears the recession will be longer and deeper than was thought.

Record sales lows on the high street, the ongoing housing market slump and a sharp fall in output for manufacturers pushed sterling to 1.1385 against the euro.

The government's response of increasing public borrowing has also driven investors to other currencies.

Against a basket of currencies, sterling has depreciated by more than 20 per cent this year.

Holidaymakers have been warned this will make Europe a more expensive place to visit, with some fearing the pound will soon be worth just one euro.

The Post Office confirmed that this is "not great news for people planning to travel to Europe for a Christmas break".

According to its holiday costs barometer for the eurozone, prices for tourist goods such as suncream and coffee have risen by around 23 per cent for Brits since last year.

A three-course meal with wine in a restaurant in Italy now costs £46.53, compared to £37.87 in 2007.

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