By Bob Howard
BBC Radio 4's Money Box
As the pound hits its lowest level ever against the euro, exporters will benefit but expatriates and tourists travelling in eurozone countries will lose out.
It is estimated the pound has lost about 17% of its value in the course of a year.
Research by the Post Office shows that a year ago changing £100 would have bought 139 euros.
To get the same number of euros now, would mean having to change £117.04.
EUROZONE: EU MEMBER STATES WITH THE EURO AS THEIR CURRENCY
Eurozone countries are still the most popular holiday destinations for British tourists.
The latest figures available show British people took 31.5 million holiday trips to them in 2006.
The Post Office survey shows buying a bottle of beer in a café in France, which would already have cost about £2.86 last year, now costs £3.37.
The same bottle is expected to now cost tourists £2.95 in Italy and £2.11 in Spain.
That is because, not only has the euro risen steeply against the pound, but also, inflation in the eurozone is now running at 3.5 percent.
ABTA, which represents travel agents and tour companies, says if holiday makers avoid the main tourist haunts, they can still eat and drink cheaply in many eurozone countries.
Making a home in Europe has become more expensive for UK expats
Meanwhile, Brits who moved abroad to live in the eurozone permanently are already feeling the pinch.
John and Alison are pensioners who moved to live in France two years ago.
"We've got fixed costs like health insurance and car insurance.
"If our incomes have dropped by 20 cents for every pound, if you add it up over the course of a month, we are losing almost a week's pension."
Anyone now looking to retire or buy a holiday home in a eurozone country is likely to have to pay many thousands of pounds more.
Simon Conn from overseas mortgage specialists Conti Financial Services, says he is already seeing a change in approach from potential buyers:
"Some people may now look for a lower priced property, so instead of looking for one with three bedrooms, they are now looking for one with two."
He added, "They may now have to borrow money rather than just pay cash."
Exports and tourism
The weak pound means trading with Europe benefits UK sellers
Overall many economists believe the fall in the value of sterling will broadly benefit the UK economy.
That is because more eurozone tourists could come to the UK, more UK residents could choose to holiday at home and UK exports will be cheaper.
Stephen Alambritis from the Federation of Small Businesses says there are opportunities for firms to increase their sales to eurozone countries:
"For about 600,000 small businesses there is the potential to take advantage of the weak pound and the strength of the euro.
The food sector, the games industry, British clothes: that type of traditional British export will benefit."
Some countries outside the eurozone have also seen their currency rise against the pound but are still considered relatively cheap destinations.
The Turkish lira has risen against the pound by almost 10% in the last year, but this rise will be felt less by British tourists, as the cost of living in Turkey is still relatively low.
A bottle of cola, which would now cost a tourist £2.95 in France, would cost the same tourist £1.06 in Turkey.
The US is considered comparatively affordable this year, with the pound worth around $1.90 and a bottle of cola there will cost you around £1.60.
The Post Office survey also shows the pound has gained in value against the currencies of some long-haul tourist destinations.
These include Jamaica, where it's risen 6% against the Jamaican dollar, or South Africa where it's up 11% against the rand.
BBC Radio 4's Money Box was broadcast on Saturday,
12 April 2008 at 1204 BST.