Less than one euro to the pound at many UK airports
- 10 October 2016
- From the section Business
Many travellers buying foreign currency at the UK's airports are now receiving less than one euro to the pound.
The continued fall in sterling's value means that the average rate available at 17 airport bureaux de change is now just 99 euro cents to the pound.
The worst rate is currently 88 euro cents at Moneycorp at Southampton airport and the best is €1.06 from the Change Group at Glasgow Prestwick.
Since the UK's Brexit vote in June, the pound has fallen sharply in value.
The average US dollar rate at the airports is down to $1.08 to the pound.
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The survey of airport bureau de change currency rates was carried out by travel money firm FairFX on Monday morning.
The firm's chief executive, Ian Strafford-Taylor, said many travellers would be shocked by the poor rates on offer.
"Currency firms operating in airports are known to offer the worst exchange rates down to taking big profit margins and today are shockingly offering holidaymakers below one euro to the pound," he said.
"Unfortunately, if the pound falls even further, rates as poor as this could be seen at airport providers up and down the country - taking advantage of their captive audience of holidaymakers and business travellers."
The survey found that most quoted rates for people buying euros with sterling clustered around one euro to the pound.
That is far below the current wholesale rate of €1.11 to the pound, which is the rate at which banks are buying and selling the currencies between each other.
Another particularly low rate was 89 euro cents from ForExchange at Cardiff airport.
The US dollar rates on offer at the 17 airports vary from just $0.97 to the pound from ForExchange at Cardiff airport, to $1.13 from ICE at Heathrow's Terminal 3.
Those compare to the current wholesale market rate of just under $1.24 to the pound.
Bureaux de change at airports are notorious for their low rates.
In the past, the firms operating them have explained that they have high running costs - for instance, because of their very long opening hours.
Travellers rates are in general much more favourable with specialist foreign exchange firms, or even if ordered in advance from the bureau operators themselves.
More expensive petrol
Another effect of the falling pound is likely to be in higher petrol prices, according to the Petrol Retailers' Association (PRA).
It forecast that vehicle owners will be paying an extra four or five pence per litre (ppl) for petrol by the end of October because retail prices have, so far, only reflected part of the recent rise in wholesale prices.
Petrol prices hinge on the value of oil, which is priced in dollars, and the falling pound against the US currency means that petrol automatically become more expensive at the pump.
"Wholesale costs to retailers have increased by over six ppl for petrol and seven ppl for diesel in the last few weeks, whereas the UK average pump prices have moved up by less than two ppl for both grades over the same time period," said Brian Madderson, Chairman of the PRA.
"Thus motorists can expect increases by the end of the month unless there are favourable corrections to the exchange rate and to global oil prices.
"The double impact of the pound weakening against US dollar and global oil prices strengthening will cause pump prices to move sharply upwards," he added.
But Mervyn King, the former governor of the Bank of England, has welcomed the fall in the pound.
In an interview with Sky News, Lord King said: "The economy was slowing somewhat before the vote and we are in a position where the rest of the world is not offering us much help.
"So from that point of view the fall in sterling is a welcome change."
He said that last week's "flash crash" in the pound had generated reactions which "were over the top".
"During the referendum campaign, someone said the real danger of Brexit is you'll end up with higher interest rates, lower house prices and a lower exchange rate, and I thought: 'dream on'."
"Because that's what we've been trying to achieve for the past three years and now we have a chance of getting it."