What date is known as Black Wednesday, when Britain left the European Exchange Rate Mechanism?

September 16, 1992, is known as Black Wednesday, when Britain left the European Exchange Rate Mechanism.

The United Kingdom had joined the ERM in 1990, committing to keep the pound within an agreed trading band against other European currencies. In 1992, investors doubted that Britain could maintain the pound’s value while facing economic weakness and pressure for lower interest rates.

The government raised interest rates and announced other measures to defend sterling, but selling pressure continued. Britain suspended the pound’s ERM membership later that day. The episode caused a major political and financial embarrassment for the government of Prime Minister John Major.

Black Wednesday is often described as a stock-market crash, but it was primarily a currency and exchange-rate crisis. The pound’s forced exit also influenced later British debates about adopting the euro and about the costs of maintaining fixed exchange-rate commitments.