The United Kingdom withdrew the pound sterling from the European Exchange Rate Mechanism on Black Wednesday, September 16, 1992.
The ERM required participating currencies to stay within agreed bands against one another. Speculators doubted that Britain could maintain sterling's exchange rate without severe economic costs, especially while interest rates and economic conditions conflicted with the policy. The Bank of England raised rates and intervened in the market, but pressure continued.
The government eventually suspended sterling's ERM membership. The episode damaged the governing Conservative Party's reputation for economic competence, although Britain later experienced stronger growth after leaving the mechanism. Black Wednesday is sometimes reduced to a story about one speculator, George Soros, but the crisis reflected broader tensions involving exchange-rate policy, interest rates, and market expectations.