Economic reality is catching up with the UK, where it is becoming clear that leaving the European Union will lead to lower living standards, billionaire investor George Soros said.
“We are fast approaching the tipping point that characterises all unsustainable economic developments,” Mr Soros wrote in an article published on Monday on the website of the Project Syndicate news organisation.
“The fact is that Brexit is a lose-lose proposition, harmful both to Britain and the European Union. It cannot be undone, but people can change their minds. Apparently, this is happening.”
Although the UK economy initially defied predictions of an immediate slowdown after the surprise Brexit vote, signs are now emerging that consumer spending is faltering as the weaker pound drives up prices. Economists in Bloomberg’s latest monthly survey see inflation reaching 3 per cent by the end of the year.
Bank of England governor Mark Carney, in a speech at London's Mansion House on Tuesday, said domestic inflation pressures remain subdued and signalled he isn't in a hurry to raise interest rates. In his first major comments in six weeks, he also said he wants to see how the economy responds to the "reality of Brexit negotiations".
The pound fell after the remarks. Mr Soros said Britain’s eventual exit from the EU would take at least five years to complete, during which the country will probably hold another election.
“If all went well, the two parties may want to remarry even before they have divorced,” he wrote. – (Bloomberg)