Holidaymakers face paying more for foreign currency as pound hits 31-year low

Many UK holidaymakers travelling abroad will pay more for foreign currency as the pound plunged to its lowest level since 1985 following the EU referendum.

Sterling was down against every single major currency group as the markets reacted to the result.

Thomas Cook suspended its travel money website due to "unprecedented customer demand" overnight and on Friday morning.

It said its immediate priority was to ensure it has "enough currency in store to fulfil outstanding orders" and hoped to be "back up and running as soon as possible".

Ian Strafford-Taylor, chief executive of currency provider FairFX, said the reaction of the pound to Brexit could signal "longer term volatility", with holidaymakers "directly impacted".

He went on: "Those consumers who did not stock up on their holiday money may find their holiday now becomes more expensive this year, if weak pound-euro rates continue into the summer.

"For example, yesterday consumers exchanging £1,000 would have received 1,306 euro but today they would only receive 1,231 euro - a difference of 74.60 euro (£60.61)."

Andrew Brown of Post Office Travel Money, which accounts for around a quarter of all UK foreign exchange transactions, urged holidaymakers to "watch currency movements very carefully".

He said: "For those who have not yet booked their holiday but are planning to travel abroad during the summer or later in the year, it will be well worth doing some homework before making a decision.

"Choosing a destination where sterling is strong and also where the local cost of living is low could make a significant difference to how far the holiday budget will stretch."

Meanwhile, Prime Minister David Cameron announced there would be "no initial change in the way our people can travel".

A spokesman for Heathrow, the UK's busiest airport, said: "Anyone travelling through the airport will find it operating normally with no changes to security and immigration."

Travel organisation Abta issued a statement to say travellers due to go abroad this summer will see "little changes to their holiday".

It went on: "Once the UK formally notifies the EU of its intention to leave, the remaining member states will have up to two years to offer the UK a deal for a future trading relationship and during this period holidaymakers will not see any immediate changes.

"However, the fall in value of the pound will have an immediate impact on holidaymakers and their spending power overseas."