Travel firms blame Barclays

A summer forecast that the pound would continue to rally for the next 12 months made by Barclays' top foreign exchange expert, has been cited as the primary reason for two travel companies entering administration.

Adarsh Sinha, the chief foreign exchange strategist at Barclays Capital, told a travel industry gathering in June that sterling would continue to appreciate with £1 being worth $1.80 in six to 12 months. Mr Sinha told the Barclays Commercial Travel Forum: "The UK story is not great, but prospects for the US and the rest of the world look worse."

But sterling has dramatically weakened, particularly against the euro, so companies heeding his warning lost out heavily. "We were going to hedge our exposure, but Barclays' strategist was so bullish that we decided not to," said one travel boss, who declined to be named. "It played a big part in my company folding," said another.

Barclays declined to comment but sources said the presentation was never meant as advice but was just a forecast.