Windfall for tourists as pound hits new high against plunging euro

Talk of interest rate rise fuels seven-year high against euro but makes life tougher for UK exporters and puts unwelcome focus on household finances

Britons holidaying in Europe this summer were handed a windfall by the Bank of England after the prospects of higher interest rates sent the pound to a seven-and-a-half-year high against the single currency.

With the euro already weakened by the Greek debt crisis, comments on Thursday by the Bank's governor, Mark Carney, pointing to dearer borrowing around the New Year pushed sterling to levels last seen in the month following the collapse of Northern Rock in the autumn of 2007.

Related: Pound strengthens against euro after Bank signals interest rate rise

Related: How will a strong pound affect my holiday?