Holiday Spending & Currency Trends: What We Learned in 2025

Who Should Read This?

• UK households and travellers planning holiday spending abroad or at home
• Finance and operations teams in UK businesses managing international payments around peak-season
• Anyone wanting to understand how holiday spending, currency trends and FX rates combined in 2025

Why It’s Worth Reading

• Holiday spending and FX rates interact: your international purchases, travel or supplier payments can be influenced by sterling’s strength or weakness
• 2025 saw distinct patterns in retail, travel and currency markets. Knowing these helps you prepare for 2026
• Discover how Indigo FX can help you navigate currency exposure during festive periods and beyond

What You’ll Learn

• Key 2025 holiday-spending trends in the UK and how they linked to currency movements
• Why sterling’s behaviour in late-year matters for both personal travel and business payments
• Practical FX strategies to turn holiday cash-flow and payments into opportunities
• How Indigo FX supports users with tailored currency tools when holiday volumes and rates move

Holiday Spending & Currency Trends: What We Learned in 2025

The end of year, a period marked by holiday shopping, travel abroad and supplier payments, is often a peak time for both expenditure and FX risk. In 2025, UK spending patterns and currency movements offered fresh insights that apply equally to individuals and businesses. Understanding what unfolded helps you prepare smarter.

1. UK Holiday Spending Trends

In 2025 the UK saw modest but positive retail growth during the “Gold Quarter” of November and December. Analysts projected value sales up by around 3–5% year-on-year (adjusted for inflation) despite cost pressures.

Households were estimated to spend ~£1,600 each on the festive period. Meanwhile, travel-related outgoings remained elevated, and online as well as offline channels both contributed to growth.

From a currency perspective, this created two key FX drivers:

• Outward payments abroad (holiday travel, purchases, supplier invoices) meant USD/EUR exposure rose.
• Higher spending volumes shortened the window between invoice/booking and settlement, raising the stake of rate movements.

2. Sterling & FX Movements in Late-2025

The pound’s behaviour around holiday season reinforced how currency risk surfaces during high-volume periods. For example:

• Sterling faced downward pressure due to fiscal concerns and gilt yield increases.
• At the same time, changes in global demand, safe-haven flows and inflation expectations affected USD and EUR, tightening cross-currency dynamics.

What that means: if you had to pay a USD/EUR supplier or travel abroad, even a small move in GBP/EUR or GBP/USD could turn a “good deal” into a more expensive one.

3. Key Lessons for Payments & Travel

a. Timing matters
With heavier spending and more payments flowing in November/December, the window for currency exposure shortens. A payment agreed in October but settled in December could face a weaker pound than expected.

b. Rate volatility lifts risk
Thin liquidity in holiday months combined with major data releases or policy meetings means rates can jump.

c. Exposure isn’t just for businesses
For individuals spending abroad (travel, shopping, property), the same FX logic applies: a weaker pound means less value for your spending.

4. Strategies to Protect Your Holiday FX Exposure

i. Use a forward contract if you know a payment is coming (e.g., supplier invoice, travel booking). Lock in today’s rate to avoid any weakening of the pound.

ii. Consider limit orders for your currency conversion: set a target rate and let the order execute when markets move in your favour.

iii. Multi-currency accounts: If you hold USD or EUR income or expect refunds, maintaining the currency rather than converting immediately can reduce exposure.

iv. Plan your payment schedule: Where possible, align bookings or invoices so that conversions happen when you can monitor rates, not under time pressure.

At Indigo FX we offer the tools, guidance and service you’ll need to manage these effectively, rather than relying on standard bank-rates or manual tracking.

5. Looking Ahead to 2026

The patterns of 2025 suggest that holiday-season spending and FX risk are more interconnected than ever. With pressure on global currencies, ongoing inflation risks and post-holiday settlement flows, the early months of 2026 may also present currency-driven surprises. Acting ahead and locking your exposure gives you the best shot at maintaining margin or value.

Final Thoughts

Holiday season isn’t just about retail or travel-fun. It’s a time when currency risk becomes tangible. Whether you’re a business paying abroad or an individual planning an overseas winter break, understanding how the pound moves during high-volume periods matters. With the right FX strategy in place, you can turn seasonal opportunity into financial strength.

If you’d like support tailored to your currency exposure during holidays or peak-season payments, get in touch with Indigo FX today.