The 16 September 1992 event when Britain left the European Exchange Rate Mechanism is known as Black Wednesday.
The United Kingdom had joined the ERM in 1990, committing to keep the pound within a narrow band against other European currencies. In 1992, intense pressure from currency traders forced the government to raise interest rates and spend foreign reserves in an effort to support sterling.
Those measures failed, and Chancellor Norman Lamont announced that the pound would leave the mechanism. The episode badly damaged the Conservative government’s economic reputation and became one of the most politically important financial events in modern British history.
The crisis is sometimes confused with a general stock-market crash, but it was primarily a currency and exchange-rate crisis. George Soros became especially associated with the event after his Quantum Fund reportedly made a large profit betting against the pound.