GOING to Europe for your holidays? Well prepare for the worst exchange rate in years.

US banking giant Morgan Stanley is now predicting that thanks to Brexit, the bureau de exchange will be giving you just one euro per pound.

Ever since Britain voted to leave the European Union, the pound has plummeted.

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On June 22 last year, the day before the referendum, the pound was trading at 1.31 euros. Yesterday it was down to 1.09 euros.

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But yesterday, in one of the starkest warnings yet, Morgan Stanley said they expected pound-euro parity in the first quarter of 2018, when £1.02 will buy just one euro.

“The UK economic outlook looks bleak, with stretched household balance sheets, Brexit negotiation uncertainty potentially weighing on business investment, and net exports growth staying subdued despite a weak pound,” the bank said.

“On the politics front, risks have also increased, with the Conservative Party showing split opinions on the UK’s Brexit position, revealing inner party tensions,” Morgan Stanley added.

Morgan Stanley also warned that debt levels were holding back growth. “The household sector has increased spending, primarily funded by unsecured lending, which is unsustainable. A consolidation of the household balance sheet, coupled with negative real wage growth, may reduce consumption, which has been propping up growth so far.

“Brexit uncertainty may also weigh on business investment, which will weaken the already lacklustre productivity growth outlook, suggesting real rates staying low.”

Meanwhile, there seems to be growing momentum behind the possibility of a new anti-Brexit political party looking to take up the abandoned centre ground in British politics.

Yesterday, James Chapman, the former journalist and chief of staff to Brexit minister David Davis, who has been leading the charge for new centrist grouping, “The Democrats”, claimed at least two members of Theresa May’s cabinet had expressed sympathy for the idea.

Chapman, said the politicians were slowly realising the Tories would never again get a majority because of the damage Brexit will do to the party.

He told BBC Radio 4’s Today programme that both Tory and Labour were backing a hard Brexit and had moved to the fringes.

“Two people in the Cabinet now, a number of people who have been in Conservative cabinets before now, better cabinets I might say than the current one, and a number of shadow cabinet ministers have also been in touch.

“They’re not saying that they are going to quit their parties but they are saying they understand that there is an enormous gap in the centre now of British politics, the two main parties have been captured by the fringes.”

Chapman went on to say: “My view is that the Conservative Party brand has now been damaged to such an extent that the party won’t be elected again and ever again get a majority.

“There are times in our national life when you have to put your nation before your country and what the hard Brexit plan Mrs May is pursuing in going to take the economy off a cliff, it’s going to make Black Wednesday look like a picnic and when that happens the Conservative Party will never be in power again.”

However, Brexit-backing Jacob Rees-Mogg, MP for North East Somerset, said he would be “very surprised” if Chapman was correct.

He told the programme: “I think most people in the high levels of the party and across the Conservative Party and the nation have accepted the democratic result of the referendum a year ago.”

What started as a handful of tweets earlier this week has grown into something much more substantial, if still currently, completely unrealistic.

Chapman, the Daily Mail’s former political editor and a senior adviser to former Chancellor George Osborne quit his government job ahead of June’s General Election and now works in public relations.

Earlier this week he tweeted: “Let’s be honest, if we had an effective electoral law leading Brexiteers would now be in jail. #wheresmy350maweekboris.”

Meanwhile, shadow chancellor John McDonnell has refused to back down from Brexit, telling an audience at the Edinburgh Fringe Labour’s priority was “the protection of jobs and the economy”.

“Our view is that it is the objectives rather than the structures which are important,” he said.