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Tory donor Chris Rokos says pound is 'vulnerable'

Worry: The Bank of England raised rates, hoping it would reduce inflation by encouraging saving rather than spending

Tory donor Rokos says the pound is ‘vulnerable’ as he warns recession could send shivers down the spine of society

Conservative donor Chris Rokos said the pound looked “vulnerable” as he warned the recession could send shivers down the spine of society.

The billionaire hedge fund firm, Rokos Capital Management, said in a letter to investors that the UK’s economic crisis would be hit hard due to the aftermath of lockdowns and countries reducing international trade.

In the letter seen by the Financial Times, Rokos Capital said: “The recession needed to bring UK inflation under control is deeper than that needed elsewhere, with potentially serious societal implications.” Sterling looks vulnerable.

Worry: The Bank of England raised rates, hoping it would reduce inflation by encouraging saving rather than spending

Worry: The Bank of England raised rates, hoping it would reduce inflation by encouraging saving rather than spending

The pound fell to $1.21 yesterday.

The Bank of England raised rates, hoping it would reduce inflation by encouraging saving rather than spending.

But he also accepts that it could cause a recession.

Rokos said factors already weighing on the economy would make it harder to control inflation. Rokos, who gave nearly £2million to the Conservative Party between 2009 and 2018, raked in a profit in 2020, capitalizing on the volatility of the pandemic.

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

He said inflation should fall below 5% by the second half of next year without the Bank’s base rate rising above 4.5%. It is currently 3%.

Rokos Capital lost 26% last year but took advantage of Kwasi Kwarteng’s mini budget by betting borrowing costs would rise.

Other funds, like Odey Asset Management, have reaped the benefits of betting against the pound, which has fallen 10% against the dollar this year.

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