Trump rally 'breaks the man who broke the Bank of England'

One of the world's most respected investors lost around $1bn (£820m) following a sustained market rally prompted by the surprise election of Donald Trump.

Stocks in the US rose to record levels by the end of last year, flying in the face of dire warnings from economists that the markets would crash over fears about the real estate mogul's famously volatile temperament.

Instead, investors quickly recalibrated expectations and focused instead on Trump's promises of a huge splurge on infrastructure spending and tax cuts, which could boost the US economy.

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Among the big names warning of a market meltdown was George Soros, who put his money where his mouth was, running up big bearish positions that would benefit if wider stock markets fell.

By the end of 2016, his losses on these positions, which he eventually exited, stood at $1bn (around £820m), says the Wall Street Journal, although his hedge fund still made a gain of five per cent for the year as a whole.

Soros is regarded as one of the world's most prescient investors, having made a name for himself as the man who "broke the Bank of England" when the pound crashed in 1992.

On that occasion, he'd built up a big position betting sterling was set to fall sharply, on the assumption that its fixed interest rate agreement with Europe was untenable.

He and other speculators eventually built up such a large trading position that the Bank of England could not artificially maintain the pound's target value, causing it to fall out of the Exchange Rate Mechanism and tumble in value.

Soros made about $1bn on that trade, too, although that was a more lucrative sum 25 years ago.