Soros says pound fall after Brexit would be bigger, more disruptive than ‘Black Wednesday’

“I would expect this devaluation to be bigger and also more disruptive than the 15 percent devaluation that occurred in September 1992, when I was fortunate enough to make a substantial profit for my hedge fund investors.”

Soros, ranked as the world’s 23rd richest person by Forbes magazine with a fortune of $24.9 billion, said the Bank of England would not cut rates after a British exit and that there would be few monetary policy tools left to ease a recession or a fall in British house prices.

He also pointed to the “very large” current account deficit in the United Kingdom and said a post-Brexit devaluation would be unlikely to improve manufacturing as trading conditions would be too uncertain to undertake new investments or hire workers.

Hungarian-born Soros said the scale of the sterling devaluation would compare with 1967, when then-Prime Minister Harold Wilson devalued the pound to $2.40 from $2.80.

Speculators, Soros said, would be eager to exploit a Brexit situation to profit.

“Today, there are speculative forces in the markets much bigger and more powerful. And they will be eager to exploit any miscalculations by the British government or British voters,” Soros said.

“Brexit would make some people very rich – but most voters considerably poorer,” Soros said.

Members of Britain’s Leave campaign say some bankers, big companies and politicians are trying to scare British voters with overblown warnings about the financial and economic impact of a Brexit.

Opponents of EU membership say Britain could prosper if it cut itself free from what they portray as a doomed German-dominated project in excessive debt-funded welfare spending.

The world’s biggest banks including Citi and Goldman Sachs will draft in senior traders to work through the night following Britain’s referendum on EU membership, set to be among the most volatile 24 hours for markets in a quarter of a century.

A vote to leave the European Union on June 23 would spook investors by undermining post-World War Two attempts at European integration and placing a question mark over the future of the United Kingdom and its $2.9 trillion economy.

Citi, Deutsche Bank, JPMorgan, Goldman Sachs, HSBC, Barclays, Royal Bank of Scotland and Lloyds are among those banks planning to have senior staff and traders working or on call in London as results start to dribble in after polls close at 2100 GMT (5 p.m. ET), according to sources.

“British voters are now grossly underestimating the true costs of Brexit,” Soros said. “Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking.”

(Editing by Elisabeth O’Leary)

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