British holidaymakers to have £77m less to spend abroad this month because of crash in the pound, new analysis claims

Exclusive: UK tourists' money to be worth significantly less after sterling hits two-year low, with family of four set to pay £50 more than a week ago

British holidaymakers will have almost £80 million less to spend abroad this month because of the crash in the value of the pound since Boris Johnson became prime minister, new analysis suggests.

Sterling has plummeted in recent days as the new government ramped up threats of a no-deal Brexit, hitting tourists whose pounds will be worth significantly less abroad than they were a week ago.

According to analysis by the People's Vote campaign, the money spent by British tourists overseas this month will be worth £77m less than it would before Mr Johnson took office.

Sterling has fallen by just over 2 per cent since Mr Johnson became prime minister, when using the Bank of England effective exchange rate, which rates the pound against a number of other major currencies.

The currency hit a new two-year low on Monday and one pound is now worth just 85 euro cents at UK airports.

According to government statistics, 6.19 million British holidaymakers spent a total of total £3.83bn abroad last August.

If the same amount was spent this month, the 2 per cent fall in the value of the pound compared to other currencies would mean they had a combined £77bn less to spend than they would have a week ago.

It means that a family of four will have almost £50 less, in addition to the increased costs of hotels or flights paid for in foreign currencies, according to the analysis.

Labour MP Paul Williams, a supporter of the People’s Vote campaign, said: “Since Boris Johnson became prime minister less than a week ago and set the country on course for a destructive no deal, the value of the pound has taken a hammering. So much so that a British family of four heading off on their summer holiday will have an average of £50 less to spend.

“No-one voted for this kind of economic uncertainty or for their summer holidays to become more expensive, but that’s exactly what Boris Johnson’s Brexit is delivering. The reason why people are finding everything more expensive when they go abroad is because investors are losing confidence in the pound and the UK’s economy."

He added: "This isn’t just a temporary inconvenience for holiday makers, it is a sign that Boris Johnson’s Brexit is already making Britain poorer. Imposing his Brexit on the people without our consent is not only profoundly undemocratic, it is guaranteeing lower living standards and shrunken opportunities for a generation.”

“With Brexit already hitting Brits in their pockets, and with the risk of a disastrous no deal growing by the day, the only way to deliver a lasting and stable conclusion to this crisis is to give the public the final say."

A Treasury spokesperson declined to comment.

The analysis was released as Jim O'Neill, a city minister under David Cameron and a former Goldman Sachs economist, claimed the government's Brexit policy, as well as Mr Johnson's spending pledges and suggestions of pressure being placed on the Bank of England, was driving down the value of the pound.

Lord O'Neill, now a crossbench peer, told BBC Radio 4's World at One: "We have got the ingredients of quite a challenge here with the pound. In my many former years [at Goldman Sachs], I would have a little quadrant of different policy combinations and what they would mean for a currency.

"In addition to the obviously increased no deal Brexit risk, I think the markets are also now looking at a government that might be leaning on an independent central bank, possibly including the choice of its new governor, as well as...having a free lunch on an expansionary fiscal policy."

Lord O’Neill said the fall in the pound would be lucrative for currency traders and hedge funds, describing the instability as "almost close to a free lunch - that you’ve got a government that is deliberately promoting the no deal risk, and one that is talking so adventurously, let’s call it, about monetary and fiscal policy too".

He added: "The world I was in, a lot of them are saying, ‘Thank goodness for Boris, he’s giving us a chance to make some money'."