Economy

Chris Rokos, Tory donor, says the pound is a ‘vulnerable.

Conservative donor Rokos says pound ‘vulnerable’ as he warns recession could send chills through society

  • The Bank of England has been raising rates, hoping this will reduce inflation.

Conservative donor Chris Rokos said the pound appears “vulnerable” and warned that the recession could send chills through society.

Billionaire hedge fund firm Rokos Capital Management said in a letter to investors that the UK’s economic downturn would hit hard because of the spillover effects of lockdowns and cuts in countries’ international trade.

In the letter seen by the Financial Times, Rokos Capital said: ‘The recession required to control inflation in the UK is deeper than that needed elsewhere, with potentially serious social implications. Sterling looks vulnerable.

Concern: The Bank of England has been raising rates, hoping this will reduce inflation by encouraging saving rather than spending.

The pound fell to $1.21 yesterday.

The Bank of England has been raising rates, hoping this will reduce inflation by encouraging saving rather than spending.

But he also accepts that this could lead to a recession.

Rokos said the factors already weighing on the economy would make it difficult to control inflation. Rokos, which gave almost £2m to the Tory party between 2009 and 2018, turned a profit in 2020, taking advantage of the volatility of the pandemic.

But not everyone is pessimistic. Yogi Dewan, of London wealth manager Hassium Asset Management, which manages the money of several super-rich families, said the concerns were “exaggerated”.

He said inflation should fall below 5 percent for the second half of next year with the Bank’s base rate going above 4.5 percent. It is currently at 3 percent.

Rokos Capital lost 26 percent last year but benefited from Kwasi Kwarteng’s mini-budget by betting borrowing costs would rise.

Other funds, such as Odey Asset Management, earned returns from bets against the pound, which has plunged 10 percent against the dollar this year.

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Jacky

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