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| George Soros, the man who nearly banhkrupted Great Britain in 1992, |
The
world’s most famous currency
speculator has warned that a vote on Thursday for Britain to leave the
EU would trigger a bigger and more damaging fall for sterling than the day he
forced Britain out of the Exchange Rate Mechanism almost a quarter of a century
ago.
George
Soros, writing in the Guardian, said a Brexit vote would spark a ‘black Friday’
for the UK, but the devaluation of sterling would bring none of the benefits to
the economy that it enjoyed after it dropped out of the ERM on 16 September 1992
– Black Wednesday.
He
said that, as in 1992, there would be big financial gains for speculators who
had bet on the UK leaving the EU but that such an outcome would leave “most
voters considerably poorer”.
Soros
said that unlike after Black Wednesday, there was little scope for a cut in
interest rates, the UK was running a much larger current account deficit, and
exporters would be unable to exploit the benefits of a cheaper pound due to the
uncertainty caused by a vote to leave the EU.
“Sterling
is almost certain to fall steeply and quickly if leave wins the referendum,”
Soros said. “I would expect this devaluation to be bigger and also more
disruptive than the 15% devaluation that occurred in September 1992, when I
was fortunate enough to make a substantial profit for my hedge fund investors
at the expense of the Bank of England and the British government.”
