Which 1992 event forced the United Kingdom to leave the European Exchange Rate Mechanism?

Black Wednesday forced the United Kingdom to leave the European Exchange Rate Mechanism on September 16, 1992.

The ERM required participating currencies to remain within agreed exchange-rate bands. Speculators believed the pound was overvalued and that the British government would struggle to keep it above its permitted lower limit. They sold pounds heavily, creating intense pressure on the currency.

The government raised interest rates and announced further measures to support sterling, but the defense failed. Britain suspended the pound’s ERM membership later that day, and the currency fell. The event became known as Black Wednesday because of its political and financial consequences.

Black Wednesday is associated with a currency crisis rather than a conventional share-price crash, but it was a major financial-market shock. It is often confused with the 1997 Asian financial crisis, which began with Thailand’s baht devaluation. The British episode centered on sterling and the ERM’s fixed-band system.