Shoppers flock to New York for Christmas bargains

British shoppers are flocking to New York to snap up Christmas bargains thanks to the best exchange rate for almost two years.

With the pound rising on the back of higher interest rates and the dollar falling amid concerns over the US economy, analysts believe they could even see the magical two dollar-pound in the coming weeks.

Virgin Atlantic said flight bookings to the Big Apple were up a fifth on this time last year as savvy Brits take advantage of the favourable conditions.

With flights getting cheaper the savings people make in the shops could even cover the cost of their travel.

The New York Post reported that the depressed dollar was turning Fifth Avenue into a "virtual flea market" for European travellers with naturally lower US prices for must-have items like iPods a further draw.

The pound was worth 1.93 dollars today, its highest level against the greenback since New Year's Eve in 2004.

Sterling last reached the two dollar mark in September 1992, just before Black Wednesday, when the government had to withdraw it from the European Exchange Rate Mechanism.

"Bookings to New York are up 20% from last year," a Virgin Atlantic spokeswoman said.

"With the exchange rate making such an incredible difference for shoppers you can see why there has been that increase."

A top of the range 80GB video iPod currently costs £259 on the UK high street, but in the US is priced at 349 dollars - just £181 at the current exchange rate.

Fashion lovers are also quids in, with cheaper prices for items like designer jeans at New York department stores.

And at Macy's foreign visitors can get an extra 11 per cent off most purchases.