Soros warns Brexit may collapse UK economy

George Soros, the billionaire who earned fame by betting against the pound in 1992, said that a British vote on Thursday to leave the European Union would trigger a bigger and more disruptive sterling devaluation than the fall on Black Wednesday.

Soros used Quantum Fund in 1992 to bet successfully that sterling was overvalued against the Deutsche Mark, forcing then-Prime Minister John Major to pull the pound out of the European Exchange Rate Mechanism.

Soros, in an opinion piece in the Guardian newspaper, said that in the event of a British exit, or Brexit, the pound would fall by at least 15 percent, and possibly more than 20 percent, to below $1.15 from its current level of around $1.46.

"The value of the pound would decline precipitously. It would also have an immediate and dramatic impact on financial markets, investment, prices and jobs," said Soros, who is 85.

"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."

23rd richest person

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.

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.

"Brexit would make some people very rich - but most voters considerably poorer," Soros said.