George Soros arriving to speak at the Open Russia Club in London. Thomson Reuters

LONDON — Billionaire investor George Soros has warned that Brexit is a "lose-lose proposition" which will trap the UK in a spiral of growing household debt, collapsed consumer spending, and falling living standards.

Soros, a Hungarian-American business magnate worth over £20 billion ($25 billion), is known as the man who "broke" the Bank of England for his role in crashing the pound during the 1992 Black Wednesday crisis after he short-sold $10 billion of the currency.

He wrote in an op-ed article published Monday that "economic reality" was beginning to catch up with UK voters, with figures published by the Office for National Statistics last week showing that wage growth was failing to keep pace with inflation, which rose when the pound fell after the Brexit vote.

Soros said: "Economic reality is beginning to catch up with the false hopes of the general population. They believed the promises of the popular press that Brexit would not reduce their living standards, so they managed to maintain those standards by running up their household debts."

He added: "Once the experience of June is repeated in subsequent months, households will realize that their living standards are falling and they will have to adjust their spending habits.

"To make matters worse, they will also realize that they have become over-indebted and they will have to pay back their debts. This will reduce the household consumption that has sustained the economy even further."

'We are fast approaching the tipping point'

The Bank of England said the amount in April borrowed by consumers on loans and credit cards was £1.5 billion and was up 10.3% on the year. Households are saving less than at any time on record, the central bank said.

Soros said the UK was "fast approaching the tipping point that characterizes all unsustainable developments."

He warned that Prime Minister Theresa May must change tack and approach Brexit negotiations, which began Monday, in a "conciliatory spirit" in hopes of securing single-market membership "for a long enough period to carry out all the legal work."

There are signs that May has already recognised the inherent weakness of her position in Brexit negotiations after she lost her parliamentary majority in the June 8 general election. The UK’s Brexit secretary, David Davis, was forced into a major climbdown on the first day of Brexit talks when he accepted the European Union's preferred timetable for talks.

Read the full op-ed article below.

NB: Soros inaccurately states that the Bank of England is raising interest rates. Last week the bank voted to keep interest rates at 0.25%, where they have been set since last summer.