Tourists looking to buy luxury products are heading to the U.K. to profit from the falling pound, UBS said in a report on Tuesday.
France, a popular destination for tourist, has seen spending by visitors contract 12 months in a row, whereas it has increased in the UK since last July. This has been supported by the Brexit vote, in June, which caused the British currency to depreciate, making goods slightly less expensive for foreigners.
"While France, the biggest single country for tourism spending in Europe, remains the weakest performer -19.5 percent in November, the U.K. was again the outperformer accelerating to +43.0 percent in November," UBS said in its latest European luxury: Global Blue report.
Data from Visit Britain, the U.K.'s official tourism website, confirmed in October that bargain hunters have been seizing the opportunity to buy luxury goods at lower prices since the summer. At the time, Nick Pope, U.K. head of fashion and luxury for Deloitte, told CNBC that if Sterling continues to fall in the coming months, luxury brands might have to increase prices to compensate for import costs. But, until that happens, international shoppers will continue to seek bargains in the U.K. luxury market.
Overall, the UBS report showed that, Europe has outperformed most of Asia in luxury sector shopping.
"This could be due to early signs of an improvement in Europe as well as the strengthening yen making Japan a less attractive tourist market," UBS said.
Chinese consumers continue to be the most important for luxury goods, UBS said, though noting an improvement among Russian tourists.
"Spend by Russians has been improving since August, posting its second successive positive month in November, following almost three years of declines. We believe this is mainly due to a stable rouble and slightly better consumer confidence," UBS said in the report.