The 1992 currency-market crisis that forced Britain out of the Exchange Rate Mechanism was called Black Wednesday.
On September 16, 1992, the British government abandoned its attempt to keep the pound within the ERM’s permitted exchange-rate band. Speculators, including George Soros, had built large positions against sterling, believing the rate was unsustainable. The government raised interest rates and spent foreign currency reserves, but the pressure continued.
Britain’s withdrawal was a major political and economic embarrassment and helped establish Soros’s reputation as a famous currency trader. The pound later fell substantially, while the United Kingdom gained greater freedom to set interest rates.
Black Wednesday was a currency crisis rather than a conventional stock-market crash. The phrase is nevertheless important in market history because it shows how fixed exchange-rate arrangements can come under attack when economic conditions conflict with official policy.