Aussies are set to enjoy cheaper travel to the UK, as the Pound dropped against every major currency following Britain’s historic vote to leave the EU. But the news is not all good.
The British Pound dropped to the lowest value it’s seen since 1985 following the EU referendum, and many economists are predicting it will have an effect on markets around the world.
“The referendum vote has profound consequences not just for the UK and Europe but will create shockwaves across the globe,” said Martin Lane, Managing Partner at K&L Gates.
One of the positive outcomes of Brexit - for Aussies at least - is that the UK is likely to become a much more affordable travel destination for international travellers as the Pound drops in value. That means it may be a great time for Aussie travellers to think about their travel money arrangements, and take advantage of the Pound’s slump by picking up a prepaid travel card.
However, the news is not all good - other areas of travel are set to become more expensive for Aussie globetrotters. While the UK itself may become a more affordable destination, travel between the UK and Europe is set to increase in price, as British airlines would need to renegotiate agreements with the EU to continue flying into European countries.
Andrew Swaffield, the CEO of Monarch Group, which owns UK based, low cost Monarch Airlines said that Brexit, “would most likely lead to higher air fares and fewer scheduled flights between the EU and UK.”
There would also likely be an increase in red tape for Aussies flying between the UK and the EU as British regulators negotiate over which EU policies would still apply to UK citizens. A report from Deloitte has identified key policies and changes that might make travel more expensive - or at least more difficult - between the UK and EU after Brexit, and some of these are likely to affect Aussies as well as Brits.
For example, at the moment, UK citizens can travel relatively freely throughout the EU, with only minor border control measures, and vice versa. This is likely to change after Brexit and numerous experts say there’s a strong possibility that Aussies travelling in both the UK and Europe will need to have a separate visa for each.
Although in the short term, the value of the Pound may make the UK an attractive destination for Aussie holidayers, the Deloitte report noted that it may take “several years” for the dust to settle and for the full effect of Brexit to become apparent.
Chief Economist at the Commonwealth Bank, Michael Blythe, said that, “Policy makers in the UK and Europe will be tied up for years trying to unravel the economic knot.”