My experience is no. The weakened Euro has helped increase the number of visitors to Greece and its islands, where I am right now. Hotels and restaurants therefore are not short of customers and although I have seen a number of closed establishments, such businesses can fail even in boom times. Prices for meals and drinks remain reasonable – no sign of businesses using inflation to combat financial problems. There have also been no effects of any strikes, although if you were to be relying on public transport you may run out of luck (I have had no problem using the buses here, however).

The holiday resorts, bars, shops and tourist attractions have been as busy as ever and it doesn’t appear that the larger economic problems of the country are having an impact on the day-to-day experiences of a tourist enjoying the hospitality of a popular holiday destination.

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?

Why is this? In short because the value of a currency is related to how confident investors are in a country’s economy. Historically, hung parliaments in Britain are unable to act as swiftly as majority governments, because consensus must be found by the members of coalition parties – who often disagree on certain principles. These delays in acting may hinder our recovery from the recession – so investors would rather not be holding on to the pound. Of course, if it does lead to a slow recovery (or even the “double dip” recession some analysts have been predicting), then this could continue to hit us in the wallet for months to come – with the effects of the recession continuing rather than abating.

Another area that was to be decided by this election was income tax and National Insurance. As I wrote previously, all the parties had set out in their manifestos their intended changes to the PAYE system. I put these all in the Election Comparison Calculator – which shows you want impact these differences would have on you. With no party yet in charge, it’s not clear what will happen about this – whose policies will be enacted? The Conservatives, who have the largest number of seats, said they would hold an emergency budget to implement some of their changes before next year. We’ll have to wait and see to find out what really happens.

This is a very encouraging sign, especially since the UK was one of the last major economies to still be in recession, others having returned to growth some months earlier. However – before we break open the champagne we should note that these are only preliminary figures – often GDP figures are corrected up or down at a later date, as explained here. Also, 0.1% is only a low growth rate and most analysts are predicting slow growth for the rest of 2010.

Still, after the recent turmoil a few quarters of good, solid, sustainable growth should stabilise the economy and see the job market (and mortgages and loans) pick up as confidence increases. A stronger national economy should also help the Pound make back some of its recent weakness against other currencies – although, again, this is likely to be a slow process.

As I wrote a few months ago, the Pound had improved both against the Euro and the Dollar during the summer months, which was good news for those of use on holiday there. It didn’t reach the highs of 2008, but it had improved since last winter. However, during August and particularly in September, a lot of the ground the Pound had made up was lost against both currencies. The pound is currently worth €1.09, from a high during the summer of €1.18, making travelling to Europe very expensive for us Brits.

I believe the reason for the Pound’s decline is the fact that the UK is still in recession whereas the powerhouses of Europe, Germany and France, have successfully grown their economies. Hopefully we will see in the next few months Britain exit from recession, and then the Pound will become a more attractive currency for investors, making it stronger and (importantly) worth more.

A strong pound can affect British businesses, impacting their export sales as their products cost more abroad and therefore fewer people buy them. The opposite, of course, is true – a strong pound makes importing foreign goods cheaper, and a weak pound makes it more expensive. With so many consumer electronics made abroad, this affects us at home.

I’ve been watching the price of camera equipment, much of which is made in Japan. A year ago, there were more than 200 Yen to the pound, which meant that buyers over here could get a good deal on lenses and the like. However, compare this graph of the cost of a Canon lens with this graph of the pound vs. the Yen. As the pound dropped as low as 122 Yen, vendors in the UK have had to increase their prices almost £100 (on that lens – more expensive products have gone up more).

As the pound gathers strength, it is climbing back up against the Yen and the cost of consumer electronics will come back down. With the country still in a recession, retailers will be competing for sales and should therefore lower their prices as soon as the rates get more favourable – passing the savings on to us! I hope so, at least – I really want that lens.

It’s improved against the dollar, too – from $1.38 a few months ago to $1.65. Although most of us will be comparing this with the $2.00 rate that was stable for some time in 2008, it’s worth remembering that that was unusually high, and $1.70 or $1.80 is more like the standard value. Compared to this, $1.65 is not too bad.

While a strong pound is good news for holidaymakers, the British tourist industry often suffers as fewer people visit our shores, and those that do come spend less while they are here. Hopefully this summer will see an improvement on previous years as visitors from the US, the Eurozone and even Japan are all still getting a good deal on their pounds, and more natives stay at home to beat the exchange rate!

Although some people in the industry are negative, believing that economic uncertainty and unemployment will mean fewer people will be taking advantage of the tourist industry, the fact that the pound is still lower than it was last summer should pull visitors in from abroad and hopefully give the industry a shot in the arm.

Exchange rates can be monitored here.