Londonderry-based journalist, economist and ‘Remain’ advocate Paul Gosling says infamous currency speculator George Soros is right in predicting a sharp fall in Sterling if the UK backs Brexit on Thursday.
Mr Gosling says a ‘Leave’ vote will guarantee a period of volatility in the Sterling market with the potential for many unknown and variegated consequences and he says Soros may be correct in suggesting the pound could fall by as much as 15 to 20 per cent in the wake of Brexit.
The Hungarian-born capitalist infamously and lucratively bet against the pound when the United Kingdom left the European Exchange Rate Mechanism (ERM) on ‘Black Wednesday’ back in 1992.
But whilst such a drastic dip in Sterling would make the Norwegian oil, South African coal and other products routinely imported via Londonderry port more expensive, as well as hiking the costs of holidays to Buncrana and Benidorm, the devaluation of the pound wouldn’t be all bad for us.
For example, you’d get more tourists and cross-border shoppers taking advantage of the cheap pound in Londonderry city centre and exports of locally produced seed potatoes, milk, butter, meat and wheat, as well as artisan food and drink products, would be far more competitive.
“It works both ways,” explains Mr Gosling. “A weak sterling would be good for exports and you would have more people coming across the border here to shop and spend their money.
“On the other hand imports would be more expensive and it would cost a lot more for people travelling to the Eurozone and across the border on holiday and so on. It’s a double-edged sword.”
Mr Gosling says he’s been slightly surprised at the recent market rally behind Sterling: the pound posted its biggest gain in eight years on Monday.
The one-time secretary of the Leicester district Labour party speculates that the most atrocious of unforeseen events last week has the potential of inadvertently swinging the poll back on the ‘Remain’ sides favour.
“I think with what happened to Jo Cox, sections of the electorate may have concerns about the motivations of some of those on the ‘Leave’ side, and it may be enough to swing the vote,” he said.