The loved-up pair caused a stir on their day out ahead of Taylor's December 13, 23rd birthday. They were spotted feeding white doves in the town square as well as sightseeing and shopping.
Pandora jewellery shop manager Claire Dibbs was beside herself with excitement when she saw new pop couple Taylor and Harry. The 24-year-old said: "They were just walking past and one of my colleagues saw them. I was hyperventilating, I just never expected to see them.
"I ran outside and grabbed my phone for a picture, Harry was posing for another photo and Taylor was just hanging back. She thought I wanted to speak to just Harry! She introduced herself, she was really lovely. She said they were just here for the day and I think they were there with his parents.
"They were in Bowness for about five hours in total, I saw them at around 2.15pm. Taylor said they were leaving soon. I was so excited - I'm more of a One Direction fan but I like them both and they were both lovely. Taylor had a lot of bags from Beatrix Potter world - I saw some cuddly toys poking out of the top of the bag.
"Lots of teenage girls have been in the shop since asking where they went. They'd done a lot of shopping. Taylor said she loved the area and said it was really pretty. They are definitely the biggest celebrities I've ever spotted around here!"
Earlier in the week the couple, who have been dubbed 'Haylor' by the press, also visited Sheffield – close to where Harry's sister Gemma goes to University. They dined out together and looked every inch the loved-up couple, according to onlookers.
Eighteen-year-old Harry and 23-year-old Taylor went public with their romance at the start of December, when they were pictured on a string of dates in the Big Apple.
Cupid's arrow apparently struck when they hung out during rehearsals for the US X Factor last month, when host Mario Lopez spotted them walking "hand-in-hand" backstage.
The TV presenter – who shares hosting duties with Khloe Kardashian - told listeners of his 104.3 MY FM radio show: "Taylor Swift was the special guest performer, and [here's] a little inside scoop for you.
'During rehearsals, Harry from One Direction came and slapped me on the back, and said, "Hey, Mario, how ya doing?" And I said, "What are you doing here?" And he sort of [pointed] toward Taylor… So Taylor Swift and Harry from One Direction - you heard it here first. [They're] officially hanging out, I can say that much."