We're not going on a summer holiday

Credit crunchiness, rising prices and the falling value of sterling are conspiring to put British holiday plans in the can.

Figures from foreign exchange specialists FairFX find 57 per cent of Brits will slash their holiday budgets this year.

For one in ten it is the fear of a recession that is making them cut back on holiday spending.

However, the biggest drain on vacation expenditure was the rising prices at home.

For 55 per cent rising food, fuel and energy bills are driving them to keep their hands in their pockets on holiday.

Recent currency shifts – making sterling fall to lows against the euro – are making 14 per cent of British holidaymakers turn to thrift.

Stephen Heath, chief executive of FairFX.com, said: "Brits have been forced to slash their holiday spending as the credit crunch and the hefty rise in the cost of living hits them hard in the pocket.

"Unless conditions change holidaymakers are planning to spend just £460 each on what should be the main break of the year."

However, for 30 per cent of Brits, the two weeks on the beach remains sacrosanct and their holiday budgets are set in stone.

Meanwhile a flush four per cent will be upping the amount of cash they will spend on holiday.

For those wanting to make the most of their cash, research by the Post Office points to Thailand being the cheapest holiday destination.

A basket of ten typical goods – including meals out, coca-cola, water and postcards – costs £28.58 in Thailand.

This compares with £40.03 in South Africa, £46.96 in Egypt and £49.94 in Bulgaria.

The most expensive destinations were the US and Spain – costing £58.69 and £59.24 respectively.

Helen Warburton, Post Office head of travel, said: "Holidaymakers planning trips further afield this year will get excellent value for money by travelling to long haul destinations. The pound is still strong against the US dollar and the new Open Skies agreement introduced this month should mean cheaper flights in the future.

"Elsewhere, sterling is up over eight per cent against the rand, making South Africa a good choice for UK tourists, and booming sales of Egyptian and Thai currency indicate that holidaymakers are already opting for trips where their pounds will stretch further."

Daniel Barnes