Top Stories
Top Stories
Currencies

Richard Branson warns the pound will 'collapse to parity' with the dollar in a hard Brexit

Sir Richard Branson
Anjali Sundaram | CNBC
Key Points
  • In an interview with the BBC, Branson said a hard Brexit would be "devastating for many Virgin companies," and would force the group to move investment away from the U.K.
  • Boris Johnson, the most likely candidate to replace British Prime Minister Theresa May, has vowed to take the U.K. out of the EU with or without a deal in place, and has refused to rule out suspending parliament in order to push the departure through.

The U.K. leaving the European Union without a deal on October 31 would cause the pound to reach "parity" with the dollar, Virgin boss Richard Branson has said.

In an interview with the BBC, Branson said a hard Brexit would be "devastating for many Virgin companies," and would force the group to move investment away from the U.K.

A hard Brexit is one in which along with leaving the European Union, the U.K. also leaves both the European single market and the customs union, eradicating existing free trade agreements with the bloc. 

Branson identified Virgin Atlantic as being particularly susceptible to the plummeting pound.

"The pound will collapse to parity with the dollar if there is a hard Brexit," he said, explaining that all of Virgin Atlantic's costs are in dollars and projecting a "bottom line hit" of around $100 million.

"A hard Brexit will result in the freight that we get from Europe, that we put on Virgin Atlantic going to America, just disappearing - we won't get any of that freight, so that would be another $100 million just down the drain, and I could carry on," he told the BBC.

"It obviously is going to result in us spending a lot less money in Britain and just putting all our energies into other countries," Branson added.

Boris Johnson, the most likely candidate to replace British Prime Minister Theresa May, has vowed to take the U.K. out of the EU with or without a deal in place, and has refused to rule out suspending parliament in order to push the departure through.

The pound was trading just above the significant $1.25 marker on Thursday, having broken below it earlier in the week.

Sir Richard Branson
Anjali Sundaram | CNBC