EU referendum: Brexit may cause biggest sterling crisis since 'Black Wednesday' - George Soros

The pound could slump by more than it did on Black Wednesday, the day in 1992 when it was forced out of the Exchange Rate Mechanism, the world's most famous currency speculator central to that crisis a quarter of a century ago has warned.

George Soros has said that speculators would gain but voters would lose from Brexit, which could cause a devaluation of sterling that would bring none of the benefits to the economy that dropping out of the ERM did on 16 September 1992.

Writing in The Guardian, Soros said: "Sterling is almost ­certain to fall steeply and quickly if Leave wins the referendum. I would expect this devaluation to be bigger and also 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."

Back then, the UK had a larger current account deficit and interest rates were cut from 10% to 5.5%. But with the official borrowing costs today so low at 0.5%, there is little the Bank of England could do if there were a recession, he said.

"Too many believe that a vote to leave will have no effect on their personal financial positions. This is wishful thinking. If Britain leaves the EU it will have at least one very clear and ­immediate effect that will touch every household: the value of the pound would decline ­precipitously.

"A vote to leave the EU would also have an immediate and dramatic impact on financial markets, investment, prices and jobs," Soros wrote in the paper.

However his warning came only hours after UK share indices and the pound sterling registered sharp gains on Monday 20 June, the biggest against the dollar for eight years, showing that the markets were more confident of a Remain result.

The Telegraph backs Brexit

Meanwhile, David Cameron's chief strategist has said that the referendum on Thursday (23 June) "will come close to the wire", as Remain has enjoyed a boost over the last few days of its campaign.

A poll for the Telegraph has shown the Remain campaign now has a seven-point lead, with 53 per cent of the vote compared to Leave's 46 per cent.

Sir Lynton Crosby told the paper: "Since the start of this polling series in March, Leave has seen steady improvements across a variety of attributes, ranging from the economy to credibility. However it has also failed to quash the almost ubiquitous perception that it is the riskier of the two options."

The Telegraph nailed its colours to the mast in its editorial as it called on voters to choose to leave the EU. It wrote: "In supporting a vote to leave, we are not harking back to a Britannic golden age lost in the mists of time but looking forward to a new beginning for our country.

"We are told it is a choice between fear and hope. If that is the case, then we choose hope," the paper said.