The 16 September 1992 collapse of the British pound and financial markets is known as Black Wednesday.
The crisis occurred after Britain joined the European Exchange Rate Mechanism, which required sterling to remain within a set band against other European currencies. Speculators, including George Soros’s fund, bet that Britain could not maintain the pound’s exchange-rate commitment while facing economic pressure and high interest rates.
The British government raised interest rates twice on the day and announced plans to suspend trading in sterling, but the measures failed to restore confidence. Britain withdrew the pound from the mechanism that evening. Sterling then depreciated substantially.
Black Wednesday is not simply a stock-market crash: it was primarily a currency and exchange-rate crisis with major effects on financial markets and economic policy. The episode also became a defining political embarrassment for the Conservative government, although later economic conditions improved after Britain left the mechanism.