As summer approaches, finally it appears that we may see some improvement in our exchange rate for the Euro (€). As anyone that has recently been abroad knows, the pound has devalued considerably over the last year. In August 2008, £1 would buy about €1.25Euros. This collapsed from November to nearly €1.00Euros. Things have gradually improved since January and currently £1 will command €1.17 Euros. So putting this another way, 1 Euro is now about 85p whereas in December it was 95p, in June 2008 it was 79p, June 2007 67p and June 2006 was 69p. So shopping in Europe this summer is still considerably more expensive than it was 2 years ago, but there are signs of improvement. A €4.00Euro coffee is now £3.40 in summer 2007 it would have been £2.68 at pretty much its worst during the Christmas break the same coffee would have cost £3.80.
You can imagine the problems for UK businesses buying stock and materials from Europe and how the impact of exchange rates will have reduced their profitability. Conversely, firms selling into Europe will have enjoyed increased trade due to the poor value of Sterling.
As I am off to Europe for my annual break, I am mildly relieved but still anticipating paying inflated prices.
(see www.finance.yahoo.com currency-converter)
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