The Panic of 1847 was the British financial crash linked to the collapse of railway speculation.
Britain experienced a major railway investment boom during the 1840s. Investors poured money into railway companies, and Parliament approved thousands of miles of proposed lines. As expectations became excessive, share prices and railway financing became vulnerable to disappointment and tighter credit.
The Bank of England raised interest rates, while poor harvests increased pressure on the economy and the demand for imported food. Railway share prices fell, banks and businesses faced liquidity problems, and several financial institutions failed or required assistance.
The crisis was eased when the government temporarily suspended the Bank Charter Act of 1844. That allowed the Bank of England to issue additional notes and increase the supply of emergency credit. The panic is distinct from the better-known American Panic of 1857, even though both involved railway speculation and financial stress.