Black Wednesday was the 1992 currency crisis that forced Britain to withdraw the pound from the European Exchange Rate Mechanism.
On September 16, 1992, the British government announced that sterling would leave the ERM after intense pressure to devalue or abandon its exchange-rate commitment. The government had raised interest rates and spent foreign-exchange reserves trying to support the pound, but speculative selling continued. The day became known as Black Wednesday.
The crisis was primarily a currency-market event, although it damaged confidence in the government and affected British financial markets. The ERM was designed to limit exchange-rate movements among participating European currencies and was an important step toward monetary integration. Britain later joined the euro’s predecessor arrangements but never adopted the euro. George Soros became famous for reportedly making a large profit by betting against sterling, though many market participants were involved in the pressure. Black Wednesday should not be confused with Black Tuesday in 1929 or Black Monday in 1987: those names refer to different market events.