Black Wednesday was the 1992 currency-market crisis that forced Britain out of the European Exchange Rate Mechanism.
On September 16, 1992, the British government tried to keep sterling within the ERM's permitted exchange-rate band. Speculators, including George Soros's investment fund, sold pounds while markets doubted that Britain could maintain the required rate without severe economic costs.
The government raised interest rates twice during the day, eventually announcing a rise to 15%, but the pressure continued. Britain suspended sterling's ERM membership that evening. The pound was subsequently allowed to float outside the system.
Black Wednesday was primarily a currency crisis rather than a conventional stock-market crash. It nevertheless caused major financial-market losses and became a defining episode in Britain's monetary history. The event also damaged the governing Conservative Party's reputation for economic competence, although the economy later recovered after sterling's depreciation and lower interest rates.