Graphic: how the euro has fared against the pound

Summer holidays in Europe will be significantly more expensive for British holidaymakers as sterling's value has plummeted 15 per cent against the euro in just 12 months.

Britons who exchange £100 for euros this year will get €119 at the current exchange rate, instead of €140 a year ago. The exchange rate drop means drinks, food and souvenirs bought abroad will cost more.

A bottle of Heineken in a café in France will cost around £3.37 this summer, compared to last year’s price of £2.86, an increase of 51p.

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Likewise, in Spain a bottle of suncream that cost £8.61 this year will cost £14 this year, according to a Post Office survey of commodity prices abroad.

Since the euro was introduced nine years ago, sterlin's high point was in 2004 when average exchange rates meant £1 could buy €1.46 – now it’s €1.19.

The pound has slumped due to Britain’s economic downturn, and the euro strengthened because of ongoing investment and a decision by the European Central Bank to hold interest rates.

Families on a strict budget should consider exchanging a portion of their holiday money each month – say £400 over four months in order to hedge against further rate drops, according to Thomas Cook.

This would need to be with a commission-free foreign exchange, though, in order to avoid accumulating fees for each transaction.

The travel company also advises limiting the use of credit and debit cards abroad, which can attract foreign exchange fees of up to 2.75 per cent, plus a further fixed charge per purchase for some debit cards.

More radical advice from Thomas Cook is to consider holidaying outside Europe. Managing director of Thomas Cook Financial Service, Mark Nancarrow said: “For those who haven’t yet booked a holiday, then other destinations to consider are the US, Turkey, Egypt and Bulgaria, where your pound will go further.”

Helen Warburton, Post Office head of travel concurs: "For those willing to travel further afield, long haul destinations such as South Africa, Jamaica and Barbados, where the pound has strengthened in value, will be a good choice."

But she added that some destinations in Europe will remain cheaper than others. “Prices vary dramatically within the eurozone so people will be looking to visit countries where a lower cost of living will offer them more for their pound, such as Spain. Turkey and eastern European countries like Bulgaria are a good bet”, she said.

The most expensive countries for British holidaymakers are Cyprus, France and Portugal, according to the Post Office statistics.

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