Black Wednesday was the 1992 currency-market event when Britain left the European Exchange Rate Mechanism. The withdrawal occurred on September 16, 1992, after intense pressure on the pound sterling.
The ERM required participating currencies to remain within agreed exchange-rate bands. Britain had joined in 1990, but recession, high interest rates, and doubts about the pound’s sustainable rate made the commitment increasingly difficult. The government raised interest rates and spent foreign-exchange reserves trying to defend sterling before suspending the pound’s ERM membership.
The episode damaged the credibility of the government’s economic policy and became a defining event in modern British financial history. It is sometimes grouped with stock-market crashes, but Black Wednesday was primarily a currency and exchange-rate crisis rather than a single-day equity-market collapse.