Here’s laughing at you, Britain.

Now that Britain is out of the EU, thanks to those with no political or economic insight swaying the vote to leave, it will take a long time for various elements to settle down.

You see, during the campaign on whether or not to remain a part of the EU, many people, including David Cameron, the Treasury, the Bank of England, the International Monetary Fund and others, were attacked for exaggerating the economic risks.

The criticism was then dangerously accepted by the British media and financial analysts. The result? British voters are “now grossly underestimating the true costs of leaving.”

The Guardian‘s George Soros, a Hungarian-American business magnate, investor, philanthropist, elaborates:

Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking. It would have at least one very clear and immediate effect that will touch every household: the value of the pound would decline precipitously. It would also have an immediate and dramatic impact on financial markets, investment, prices and jobs.

As opinion polls on the referendum result fluctuate, I want to offer a clear set of facts, based on my six decades of experience in financial markets, to help voters understand the very real consequences of a vote to leave the EU.

The Bank of England, the Institute for Fiscal Studies and the IMF have assessed the long-term economic consequences of Brexit. They suggest an income loss of £3,000 to £5,000 annually per household – once the British economy settles down to its new steady-state five years or so after Brexit. But there are some more immediate financial consequences that have hardly been mentioned in the referendum debate.

To start off, sterling is almost certain to fall steeply and quickly if there is a vote to leave– even more so after yesterday’s rebound as markets reacted to the shift in opinion polls towards remain. I would expect this devaluation to be bigger and 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.

Read the rest of George’s insight piece HERE.

[source: theguardian]