Buy euros and dollars now before sterling slumps: that was the message from a leading foreign currency expert at a travel industry event on the impact of Brexit.
Nick Parsons, chief writer and editor for OFX, said: “The pound is about as good as it gets. Forward buy some of your currency needs.”
Addressing a forum on Brexit organised by ABTA, the travel association, and the law firm K&L Gates, he warned: “The economic background is going to be challenging for the UK economy and the travel industry.”
Prior to the EU referendum in June 2016, the pound stood at over €1.30. It is currently trading at €1.13, having lost around one-eighth of its value. But it is stronger against the euro than last summer, when it hit a low of €1.08. At some bureaux de change, £1 was worth less than €1.
Against the dollar, sterling has made up most of the ground lost since the vote. The pound was above $1.45 in June 2016. It dropped sharply after the referendum result and fell as low as $1.20. But it is now back to $1.40.
Mr Parsons said: “The pace of growth we’re going to see over the next few years will be dismal.” He also predicted that India will soon overtake the UK as the world’s fifth-biggest economy, and that Russia will fall from 12th to 14th place, with Spain and Australia overtaking the largest country on the planet.
Earlier, the chief executive of ABTA, Mark Tanzer, demanded action from politicians — calling them “long on rhetoric, and short on detail”.
“It is time now for candour and transparency, so that citizens and businesses can start to plan for their future,” he said. “The 53 million trips from the UK to the EU every year are a vital trade and cultural artery; the challenge for the politicians and the diplomats is to maintain this flow into the future.”
The travel industry wants certainty on aviation access to Europe, border formalities and its ability to move key workers around the Continent.
Travellers are unsure what will happen to consumer rights such as flight disruption, the European Health Insurance Card and the abolition of roaming charges.
On free movement of labour, Andrew Stewart, chief financial office of Hotelplan UK, said: “The environment for UK staff [in Europe] is a lot more hostile than it was a year ago.”
Kate Nicholls, chief executive of UK Hospitality, warned that British hotels and restaurants faced a labour shortage, and said: “There are too many scenarios to plan for.”
Mr Tanzer said: “The greatest catastrophes in Europe have been when nationalism rises and diplomacy fails.
“I believe that the next six months represent the biggest political challenge since the Second World War.
“Both the EU the UK want tourism to continue – only politics can get in the way.”