Overview

• Sterling has slid about 4% over the past two months to around €1.147, marking its weakest level against the euro since November 2023.
• Traders point to expected Bank of England rate cuts versus steady ECB policy and weak UK growth data as primary drivers of the pound’s decline.
• Recent increases to employer National Insurance contributions and downgrades by the Office for Budget Responsibility have amplified fiscal risk concerns and pushed up gilt yields.
• Currency experts urge holidaymakers to buy euros immediately, use pre-paid travel cards, avoid airport exchanges and consider opening euro-denominated bank accounts.
• Non-Eurozone destinations such as the United States and Turkey offer better value given sterling’s stronger position against their currencies.