In Newcastle, you will transact in pounds. Possibly some of the airport hotels/restaurants will trade in euros. Not in town, though.

Beer: £3/pint is median-ish (that's pub pricing, it'll be more in restaurants)

Fags: £10/pack of 20. Note that all fags in the UK are in unbranded packaging, with pictures of terrible smoking-related diseases on them.

Hotel: I'd go for a Premier Inn. Not posh, but super-consistent. £95 does sound like the low end in holiday season, though.