If you are a Brit dreaming of a vacation abroad, consider this before you book-it is going to be more costly. On Friday Moody's credit agency downgraded the UK's credit rating to AA1 from triple A. It may surprise you what a difference this minor change will make.
Certainly world leaders have tried recently to play down the power of credit rating agencies. The US administration is attempting to sue Standard and Poors credit agency, blaming them in part for the US economic tumble of 2008. The US administration cites S & P at fault as that agency did not recognise financial problems until it was already too late. Of course the USA likes to blame any person, country or organisation rather than hold its hands up and shout "fair cop it was I"
Still, for all the talk of credit agancies being less powerful the downgrade of the UK economy is already having noticeable effects. One is on the value of our currency.
If you live outside of the UK, and plan a trip to Great Britain this soon, the currency fall could be good news. If you are a Brit hoping to vacation overseas this year it is not. The pound has fallen in value against the dollar and the Euro with an obvious effect. British holidaymakers abroad will get less value for money.
Of course in truth as UK austerity measures bite the number of Brits vacationing abroad will dip anyway. It is always possible to get a bargain break if you are not too choosy over the standard of your accommodation, resort and the like, but will you be able to afford the cost of your "holiday spending money"? Probably not.
At time of writing the UK pound is worth 1.5128 against the US dollar and 1.1399 against the Euro.