The pound has climbed to its highest level against the euro in more than seven years, passing €1.40 and giving a welcome boost to the Algarve as British holidaymakers take advantage of their buying power.
Compared to a year ago, British visitors changing £100 will get an extra €22 to spend and the region's tourism industry is changing from a mood of quiet confidence to one of great expectations.
Renewed fears over the Greek problem within the eurozone, combined with the European Central Bank’s launch of its quantitative easing programme has continued to push the euro lower with many expecting parity with the US dollar, a situation last seen in December 2002.
The ECB’s bond buying spree is set to run into 2016 with many analysts predicting that £1 will soon be buying €1.45, great news for British buyers of property in the Algarve who now have the double advantage of still depressed property prices and higher buying power.
The ECB started its €1.1 trillion programme of buying up government bonds in a move to reduce the risks of deflation and to inject some life into European members' economies. One of the side affects is that Europe now looks 'cheap as chips' to Britons with money in their pockets.
Comments
Who knows what lies ahead in terms of the exchange rate? I have often expressed my disapproval of Gordon Brown and his actions as Chancellor and Prime Minister. But staying out of the eurozone may be one decision that he got right.