Black Wednesday was the 1992 currency-market crisis that caused the British pound to leave the European Exchange Rate Mechanism.
On September 16, 1992, the United Kingdom suspended the pound’s participation in the ERM after intense pressure from currency traders. The government had tried to keep sterling within its permitted exchange-rate band by raising interest rates and spending foreign-exchange reserves, but those measures failed to restore confidence.
The event became a major political and financial setback for John Major’s Conservative government. George Soros became particularly associated with the speculation and was widely reported to have made about one billion dollars. Black Wednesday was primarily a currency crisis rather than a conventional stock-market crash, but it caused sharp market disruption and is frequently included in histories of modern financial crashes. The pound’s withdrawal also damaged public confidence in Britain’s ERM policy.