Billionaire currency trader George Soros has warned that a vote to leave the EU will trigger a plunge in the British pound greater than Black Wednesday but without the benefits seen after the crisis that made him a fortune.
The financier said he was certain sterling would fall steeply and quickly should voters back Brexit tomorrow, leading to a Black Friday scenario more immediate and dramatic than when Britain crashed out of the European exchange rate mechanism (ERM) in the 1990s. However, unlike the departure then, there would be none of the benefits to the economy seen by a devalued pound and most voters will be left “considerably poorer”, he predicted.
Mr Soros said it was wishful thinking by many that a Leave vote would have little effect on their personal finances, with only a lucky few City speculators in line to get rich on such a move.
His intervention comes as the value of sterling climbed on Monday after polls showed the field between Remain and Leave had narrowed.
The Hungarian’s hedge fund reportedly made almost €1bn from a €9bn bet against the pound at the time of Britain leaving the ERM. Speaking to The Guardian, he said a devaluation in the pound would be bigger and more disruptive than the 15% drop seen in September 1992.
However, with Britain’s finances in a more fragile state than then and interest rates running at record lows, there would be little room for the Bank of England to manoeuvre. Furthermore, the resulting uncertainty would impact exporters hoping to exploit a cheaper pound, Mr Soros warned.
“Too many believe that a vote to Leave will have no effect on their personal financial positions. This is wishful thinking.
“If Britain leaves the EU it will have at least one very clear and immediate effect that will touch every household: the value of the pound would decline precipitously.
“A vote to leave the EU would also have an immediate and dramatic impact on financial markets, investment, prices and jobs.
“A vote to Leave could see the week end with a Black Friday and serious consequences for ordinary people.”
Leading Leave campaigner Boris Johnson played down the significance of Mr Soros’s intervention, telling LBC radio: “The people I listen to are not people like George Soros, who speculate on market movements. That’s how he makes his money.
“I listen to people like Anthony Bamford of JCB, the biggest private manufacturer in this country.”
Meanwhile, one of Asia’s richest men, Li Ka-shing, has come out in favour of Britain remaining in the EU, warning that a vote to leave would be “detrimental to the UK”.
Mr Li, who has significant business interests in Britain, told Bloomberg TV: “Of course, I hope that the UK doesn’t leave the EU. If Brexit happens, it will be detrimental to the UK and it will have a negative impact to the whole of Europe.”
Richard Branson, Martin Sorrell, and top bosses at Toyota and General Electric have all warned on the ramifications of Brexit.
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