MILLIONS of holidaymakers were hit in the pocket as the pound slumped to a record low against the euro yesterday.

It is also bad news for importers, including crisis-hit retailers, who will find their costs go up.

Sterling's value has fallen by nearly a quarter in the past year.

Amid worsening signs for the economy, the pound slipped to below 1.14 euros yesterday.

Tourist rates went even lower, with many outlets offering just 1.07 euros for each pound.

Sterling also hit rock-bottom against a series of other currencies. Helen Warburton, of the Post Office, said: "UK holidaymakers must brace themselves for a 10 per cent drop in the buying power of the pound if they are travelling to the eurozone nowcompared with six months ago.

"Going back a year, sterling has slumped by a whopping 23 per cent."

Stephen Heath, of online urrency experts FairFX.com, added: "Anyone planning to buy euros soon would be wise to buy half now at today's rates before they fall even further."

One UK group who will benefit from a weaker pound are exporters.

The news came as top think tank National Institute of Economic and Social Research warned the economy shrank one per cent in the three months to November.

Figures next month are expected to confirm the country is officially in recession, with manufacturing and retail data having been dire.

The Bank of England have tried to soften the slowdown by slashing interest rates to just two per cent.

But with rates still 2.5 per cent in the eurozone, investors are moving their money out of sterling and into currencies that give them better returns.

The pound hit a six-and-a-half-year low against the dollar last week, falling below EUR1.45 for the first time since April 2002.

It stayed below EUR1.50 yesterday, trading at just under EUR1.48.

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