With the economy having improved over the last couple of months, and many people last year choosing to have a cheaper holiday and stay in the UK, perhaps this year there’ll be more of us thinking of treating ourselves to a trip to Europe this summer. And if you’re one of them, good news – over the last few weeks the Euro exchange rate has improved significantly!

Although €1.20 to the pound is not what you might consider a great rate, it’s not been at that level since the pound plummetted at the end of 2008. Unfortunately, it’s not all good news – this improvement is not due to the pound getting stronger but the Euro getting weaker – the pound continues to fall against the Yen and the Dollar (although it has seen a recent rally on this last count). The BBC’s Gavin Hewitt has written a great blog post explaining why the Euro is in such trouble.

When will the pound return to its previous strong position? Well, the rates we remember of a few years ago such as 2 dollars to the pound are not going to return anytime soon, but if confidence in the UK economy increases then investors will value the pound more. An increase in UK interest rates would also give a boost (since saving pounds then becomes more worthwhile) – but this would impact on mortgage interest rates for a lot of homeowners. Would you rather find it easier to pay your mortgage every month, or have a bit extra holiday money in the summer?

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Foreign Currency

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3 Comments to Pound’s Euro rate improves

  1. The election calculator was awesome, any chance of an Emergency Budget calculator? Seems like they have made some pretty big changes, not all that similar to the ones announced pre-election…

  2. Pretendiname on June 22nd, 2010
  3. Of course – please see this post on the Emergency Budget and the changes made to the calculator.

    p.s. Glad you liked the Election Calculator!

  4. admin on June 22nd, 2010
  5. […] experience is no. The weakened Euro has helped increase the number of visitors to Greece and its islands, where I am right now. Hotels […]

  6. Holidaying in an overdrawn country | The Salary Calculator on July 5th, 2010

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