Could Brexit Make Travel More Expensive for Brits?
The latest Treasury report on the possible economic effects should the UK leave the European Union has suggested that the strength of the pound might fall by up to 12%.
The drop in the buying power of the pound is forecast to occur in the two years following a UK decision to leave the EU.
“All the evidence points to the value of the pound falling after a vote to leave the EU,” Prime Minister David Cameron has warned. Of course, even though the referendum settles a European issue, the loss of the pound’s value would be felt across exchanges with all currencies, meaning travel even beyond the EU would become more expensive should the pound devalue post-Brexit.
The likelihood of the UK remaining in Europe is anything but certain. With the vote in June, May has seen nip and tuck polling results, although Remain is the most widely anticipated outcome. However, given the stunningly incorrect poll predications for UK general elections, many are sceptical about any poll results.
A weak pound abroad
For families and businesses alike, a weaker pound will cause travel expenses to rise, as the amount of pounds needed to purchase a set amount of foreign currency will rise. Businesses may be forced to squeeze expenses to keep corporate, executive business travel expenses manageable, families will find their money no longer goes as far as it used to.
Solutions to travelling with a weak currency
Families travelling while the pound is weak can offset the loss in value by choosing to visit other areas with weak currencies. Areas such as South East Asia and South America traditionally have weak currencies, meaning that even a 12% drop in the pound would not be felt too badly. For example, one pound currently buys 20 Argentine Pesos. Even if this rate of 0.05 exchange rate rose by 12% to 0.06, £1 would still be worth a handsome $18.
Businesses, of course, have less influence over where they might have to send their employees. But this doesn’t mean that a weak pound would require a more austere company travel policy.
By using a Travel Management company to handle your company’s travel, businesses stand to make a wealth of efficiencies: taking pressure off staff workloads, accessing competitive rates and benefiting from the organisational clout of a team of expert travel planners.
To find out what Simplexity’s Business Travel Managers can do for your company, call 0203 535 9290 or email email@example.com now.