London: Warning that the pound would plunge “precipitously” if Britain votes to quit the EU, legendary investor George Soros today predicted that the possible impact this time would be “bigger” and “more disruptive” than the 15 % devaluation that occurred in 1992.
Writing in the Guardian ahead of Thursday’s referendum, Soros, who made a fortune betting against the pound when Britain crashed out of the European Exchange Rate Mechanism in September 1992, said the drop will be more dramatic this time if the UK leaves the 28-member European Union (EU).
On June 23, voters of the United Kingdom will voice their opinion whether the nation should ‘Remain’ in or ‘Leave’ the European Union. Soros said in his article that leaving the EU would see sterling fall by at least 15 %, and possibly more than 20 %, to below USD 1.15 from its current level of around USD 1.46.
“British voters are now grossly underestimating the true costs of Brexit. Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking.”
Soros warned that the Bank of England’s ability to respond to a recession or fall in house prices was limited, with many monetary tools already having been used to steer the UK out of the global financial meltdown. -AFP
