The pound sterling was forced out of the European Exchange Rate Mechanism during Black Wednesday on September 16, 1992.
The United Kingdom had joined the ERM in 1990, agreeing to keep the pound within a specified band against other European currencies. In 1992, pressure from currency traders made that target increasingly difficult to defend. The Bank of England raised interest rates and intervened in markets, but the measures failed.
The government suspended the pound’s ERM membership on Black Wednesday. The episode damaged the governing Conservative Party’s reputation for economic competence, although the subsequent fall in interest rates and weaker pound later supported British economic recovery.
George Soros became famous for profiting from a large short position against sterling, but the crisis involved many traders and broader economic tensions. Black Wednesday was not a stock-market crash in the narrow sense; it was a major European currency-market crisis with wider financial consequences.