Holidaymakers, as well as regular shoppers, were caught in surprise as the British pound fell into its 10 month low. Experts also warned that the sterling will drop further.

As the trading day passes, the pound fell 1.6 per cent against the US dollar – a record low since May. The unexpected drop from $1.52 to $1.48 was the sterling’s biggest one-day fall since January 2009. The sterling had lost almost 10 cents against the US dollar in just a week, affecting holidaymakers, petrol pump prices and import expenditures of businesses. This year alone, the pound lost 7 per cent against the US dollar.

The sterling fell against the euro as well, crashing below 1.10, and to other foremost currencies. It also hit a 24-year low of $1.35 in 2009 due to the recession.

Meanwhile, people behind the UK travel industry are recommending families who have not booked their Easter holidays yet to mull over other travel destinations which are outside the Euro zone. The managing director of Co-operative Travel, Mike Greenacre, said that there is a significant rise in demand for holiday travels going to Turkey, Egypt and North Africa. In addition, Spanish resorts are adjusting their prices to cope with the trend.

Mark O’Sullivan of Currencies Direct said that not until the UK political situation eases, the pound will still be vulnerable. Some analysts even added that Gordon Brown’s denial to confirm that Alistair Darling will remain as Chancellor despite Labour’s victory was adding further vulnerability to the sterling.