George Soros is clear: A vote to leave the EU would trigger a collapse in the British pound worse than Black Wednesday.
Writing in The Guardian on Monday, the legendary macro trader said that Britain currently risks subjecting itself to one of the worst one-day currency collapses in its history if it votes to leave the European Union.
“It is reasonable to assume, given the expectations implied by the market pricing at present, that after a Brexit vote the pound would fall by at least 15% and possibly more than 20%,” Soros writes.
“But I don’t think the 1992 experience would be repeated. That devaluation was healthy because the government was relieved of its obligation to ‘defend’ an overvalued pound with damagingly high interest rates after the breakdown of the exchange rate mechanism. This time, a large devaluation would be much less benign than in 1992, for at least three reasons.”