The currency crunch: British tourists pay price for euro's strength

[P-N]

The currency crunch: British tourists pay price for euro's strength

Today a euro is worth 80p, an all-time high against the pound. Bad news for British holidaymakers – but are there more serious consequences of living next door to the world's strongest currency?

Tens of millions of British people will experience their own credit crunch on holiday this year as the soaring value of the euro forces them to pay more for everything from the price of a coffee in a Parisian cafe to a hotel room in Barcelona. As currency traders pushed the European single currency to a record high against the pound yesterday, holidaymakers were coming to terms with the fact they now have almost a fifth less spending power on the Continent than a year ago.


The 17 per cent fall since last February has come about as the euro has powered ahead on the strength of its member economies, while the pound has slumped, most recently because of the knock-on effects of the sub-prime collapse in the US.

The euro's new high of 80p, reached in early trading yesterday, came after the International Monetary Fund warned that UK growth would only hit 1.6 per cent this year, compared with the Government's claim of up to 2.25 per cent.

The euro's surge may spur new theories from economists that the currency of the eurozone will become the main international unit of currency as early as 2015, upsetting almost the best part of a century of dominance of the dollar.

For holidaymakers, however, the collapse of the pound has an earthier reality that will curtail their spending power in shops and restaurants in Ireland and on the Continent. In practice, it means spending money of £500 earmarked for eating out, trips and presents is now worth only £415 in the 15 eurozone states.

The 42 million foreign holidays a year that British people take are influenced by affordability and, during the past two years, the cheap dollar has lured thousands of Britons to stock up on designer jeans and iPods in New York.

However, the majority of foreign holidays, some 31 million, are taken in the eurozone and going there – and staying there – has become markedly more expensive.

As a result of the currency fluctuation, a family weekend break to Disneyland in Paris that would have cost £456 last year costs £533 this month. A day's car rental in Vienna that would have set back a Briton £56 now costs £67.

And those expecting to savour a meal for two Ferran Adria's acclaimed El Bulli restaurant in Spain will find the experience has risen in price from £195 to £236.

Many people who had been hoping to go on holiday to France or Spain may be forced to change plans and stay at home instead.

Others may look for cheaper destinations outside the eurozone, such as Bulgaria or Croatia.

The Association of British Travel Agents said yesterday that the rise of the euro might prompt the growth in journeys to Turkey and Egypt as well as long-haul trips.

At home, the surging euro will apply upwards pressure on much that we import from the Continent, from cheese to cars, though retailers may take some of the pain.

But there will be a sign of relief from British companies battling to export their goods as their products become cheaper in the 15 euro countries.

After a shaky start in 1999, when the economies of the 11 participating states were lurching downward, the euro has become a totemic success for the European project and has been rising against the pound for more than a year.

Further pressure is likely to be piled on to the pound – and in favour of the euro – today if, as expected, the Bank of England's Monetary Policy Committee cuts interest rates. Some economists believe the rate may cut by as much as half a per cent.

Geoff Kendrick, a currency strategist, said: "The UK has clearly softened a lot more than Europe and I guess that's why we'll see the Bank of England cut rates tomorrow while the ECB will be hawkish... At least for now it looks like the trend (in euro/sterling) is well and truly intact."

The pound has weakened after days of bad economic news which has increased the chances of the interest rate being cut, reducing the attractiveness of holding the currency.

This week, the Halifax house price index posted its steepest monthly fall in over 15 years, a 2.5 per cent fall in a single month. Banks have withdrawn their 100 per cent mortgage deals and Nationwide's consumer confidence fell to its lowest level in four years.

[SilverBullet]

Don't feel too sorry for the British - this is old news for Americans  The British just need to get used to it. And while at it - now they can regret they declined to join the EURO. So much for that decision.  Perhaps it will teach them a lesson and replace the pound with the Euro sooner than later.

This summer reportedly a large reduction in Amerrcian tourists is expected in Europe. Many Americans now prefer to vacation in places where they get more value for their USD I can think of a few nice places in Eastern Europe and South America before I would go to the EU these days 

[P-N]

Rightly or wrongly, I don't think you will find many British who would rue the decision not to adopt the Euro regardless of the increasing value of the Euro.   Many every day Brits are not that fond of the EU now it has taken on a political mantle.  Britain joined in the 1970's for trade reasons only (The Common Market as was)  when the EU did not have a political face.

I won't be holding my breath waiting for Blighty to adopt the Euro, the currency has been around for a reasonable length of time, and Britain has guaranteed the people a referendem on changing the currency (if ever there is to be a government even brave enough to mute the idea with any conviction.....which I doubt), but I am certain even in 10 years time the answer would be an overwhelming NO.

Many Brits fly to NY every year (myself included in the past) to do Christmas shopping as £1 = $2 (on average) and American prices are so low it is worth the cost of travel.  I cannot say I ever went to Europe specifically to Christmas shop even when the Euro was weaker.

If there was a referendem given to the British people on remaining in the EU, I really would not like to "call" the outcome, which is probably why there won't be one in the medium term future......no politician could "call" it either. 

[SilverBullet]

New York is happy for all the tourists and the money they spend. iPhone is sold out all over New York. There are now 250,000 iPhones in use in Russia - all hacked - since Apple hasn't even started selling them there. If you see two business men having lunch in Moscow, the likelyhood for both to have the iPhone on the table is high. It is the status phone in Moscow right now + the top models of NOKIA  The iPhones are being sent in suitcases to Russia every day, reportedly thousands every month. I heard an estimate of 25,000 phones per month but might be too high? Anyhow it is excellent for the US economy. 

[rjm]

Purely out of interest how much can they be bought for in the States, I assume then that they can be bought without contract unlike in the UK wheere the only way you can get one is by sigining up to a very bad contract which means you pay about $2000 for the phone over 18 months.

If one is sent to Ukraine can they be easily used with a Kyivstar sim or does it need some tweeking first.

Does anyone have any experiences of shipping one from the States to Ukraine

With regards to the Euro, Ive never met ONE person in the UK that wants it, the pound is doing ok and I suggest that the euros current rate is very artificial in any case.

As Brits we have had it good with the dollar so cant complain really that the Euro is having a good period!

 

New York is happy for all the tourists and the money they spend. iPhone is sold out all over New York. There are now 250,000 iPhones in use in Russia - all hacked - since Apple hasn't even started selling them there. If you see two business men having lunch in Moscow, the likelyhood for both to have the iPhone on the table is high. It is the status phone in Moscow right now + the top models of NOKIA  The iPhones are being sent in suitcases to Russia every day, reportedly thousands every month. I heard an estimate of 25,000 phones per month but might be too high? Anyhow it is excellent for the US economy. 

[Carlushika]

Who says you have to have a contract for an iPhone in UK? I can get an unlocked one easily but prefer the simplicity offered by my Motorola (texts only due to incompatibility with hearing aid).

Only the first batches were locked and nowadays it is a piece of cake to obtain an unlocked version into which you can locate your existing SIM and away you go.

[rjm]

In UK only the operator o2 has the rights to sell Iphone and they have chosen to do it on a contract only basis.

You need to put down a pre pament of about 300 pounds then pay about 35 pounds for the next 18 months resulting in a grand total of over 900 pounds.

This was well highlighted and publicised at the time of release and put many off wanting one.

The iphone has not taken off as well as it should have in UK for this very reason.

I beleive that in France however it can be bought without having to take out a contract!

[Carlushika]

BRAND NEW UNLOCKED 8GB Apple iPhones for just £299.99 inc Royal Mail Special Dilivery postage, and BRAND NEW UNLOCKED 16GB Apple iPhones for just £379.99 also incluiding Royal Mail Special delivery!

These iPhones can be used with any UK or Worldwide provider - just take the SIM out of your existing 'phone.

Your pricing is about right but my point is you don't have to be locked into a long contract with anyone.

[SilverBullet]

BRAND NEW UNLOCKED 8GB Apple iPhones for just £299.99 inc Royal Mail Special Dilivery postage, and BRAND NEW UNLOCKED 16GB Apple iPhones for just £379.99 also incluiding Royal Mail Special delivery!

These iPhones can be used with any UK or Worldwide provider - just take the SIM out of your existing 'phone.

Your pricing is about right but my point is you don't have to be locked into a long contract with anyone.

The phone is less expensive in the US due to the exchange rate. They cost 50% less in the US  The 16GB cost $499 - the 8GB $399. The latter will be phased out. A new 32GB to arrive this summer. In New York all iPhones have been sold out, 25,000 new iPhones are hitting the streets in Russia every month. Shipped in suit cases by Russian tourists in the Big Apple.

[rjm]

To be fair I havent been in the UK this year so I wasnt aware of this offer.

However I am aware that there were many similar scams with the Nokia N95 8gb when it came out, one company had a similar ad as the one you put up advertising them for £150 but of course it was a con.

I will put my friend onto this, any chance of putting up the web address of this ad or sending it to me by pm.

If this offer is genuine I know more than a few people in UK that will buy it.

Many thanks

BRAND NEW UNLOCKED 8GB Apple iPhones for just £299.99 inc Royal Mail Special Dilivery postage, and BRAND NEW UNLOCKED 16GB Apple iPhones for just £379.99 also incluiding Royal Mail Special delivery!

These iPhones can be used with any UK or Worldwide provider - just take the SIM out of your existing 'phone.

Your pricing is about right but my point is you don't have to be locked into a long contract with anyone.

[Carlushika]

Well, I found them on eBay. Subject to carrying out the usual eBay checks and ensuring the feedback is satisfactory, you should be OK.

Be careful of buying from abroad as you might be liable for duty. Better to buy from a good UK powerseller.

As you say, prices here in the UK are nothing short of criminal as are prices for most electronics goods when compared to the States.

[rjm]

Yes I checked ebay and there are 2 or 3 different ones and I agree that the fact they are powersellers certainly looks promising, one of the power sellers is from USA which would be about right.

I might just play it safe and wait until some American is nice enough to take one back in his suitcase for me  , but by all accounts he will be spending most of his trip tracing one for me 

You are right about American prices, I want a new notebook (as per another thread) and the option of getting one brought from the States would also be a good move judging by the these prices!

http://www.walmart.com/search/browse-ng.do?ic=24_0&ref=125875.183815+500500.4294295865&fromPageCatId=4070&catNavId=4070

[ecocks]

You might check the Dell site and see if they have a decent delivery system into Ukraine.

ACER is a mid-range brand that is probably supportable.  I had a laptop brought in by a friend from the states and my step-son seems to think it would be unobtainable here at half again the price I paid.  One reason is to get a fully English, plus completely legal, setup on Office and all the programs I regularly run on a PC (anti-virus, anti-spyware, etc. Love it.

[rjm]

Thats great advice thanks!

What is the situation regarding customs and paying tax if you get one directly shipped from the States?

You might check the Dell site and see if they have a decent delivery system into Ukraine.

ACER is a mid-range brand that is probably supportable.  I had a laptop brought in by a friend from the states and my step-son seems to think it would be unobtainable here at half again the price I paid.  One reason is to get a fully English, plus completely legal, setup on Office and all the programs I regularly run on a PC (anti-virus, anti-spyware, etc. Love it.

[Carlushika]

Ask Dell! If you are in Ukraine, then this is for you.

http://www1.euro.dell.com/content/topics/topic.aspx/emea/contact/edb/ukraine_en?c=ed&l=en&s=bsd


Damn fine computers - that is after nearly 18 years portables and desktops without so much as a whimper from me!

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