Black Wednesday was 16 September 1992, when Britain withdrew the pound sterling from the European Exchange Rate Mechanism (ERM) after failing to keep its currency within the required trading band. The event followed intense speculation and a sharp market crisis.
The UK government had joined the ERM in 1990, linking sterling to other European currencies while trying to maintain exchange-rate stability. In September 1992, traders sold pounds heavily, betting that economic conditions made the official parity unsustainable. The Bank of England raised interest rates and spent billions of reserves, but pressure continued.
Chancellor Norman Lamont announced suspension of the pound's ERM membership that evening. Sterling then depreciated, while Britain abandoned the planned rate defense. The episode damaged the governing Conservative Party's reputation and influenced later debates over joining the euro.
Black Wednesday is a currency-market crash rather than a conventional share-market collapse. It is also called the “White Wednesday” sarcastically by some critics because the devaluation eventually aided recovery.