The hedge fund manager Crispin Odey has warned Britain is destined to have a recession and predicts the stock market will fall by 80% after Brexit.
Odey, who backed the vote to leave the EU, made the prediction in a letter to investors. He also said the Bank of England should be raising interest rates, not cutting them, as it did in August after the referendum result.
“What the UK is promising is rising wages, recession, inflation and falling profits,” said Odey. “Not exactly the prize that ticketholders in the FTSE and the gilt market have paid up for.”
The pound has fallen nearly 20% since the Brexit vote in June and the FTSE 100 hit record highs. Odey said: “As sterling falls against all its trading partners’ currencies, it is mechanically ensuring that inflation rises up through 3.5%.”
A BBC documentary has previously quoted him as saying he made £220m by betting the markets would collapse as a result of the vote to leave the 28-member bloc.
His Opus Fund has 28% of its assets in cash and made gains of 1.1% in September.