Black Wednesday was the 1992 British pound crisis that forced the United Kingdom to leave the European Exchange Rate Mechanism.
On September 16, 1992, the British government tried to keep sterling within the ERM’s permitted exchange-rate band. Speculators, including George Soros’s fund, sold pounds while expecting the currency to weaken or the government to abandon the target.
The government raised interest rates and spent foreign-exchange reserves in an attempt to support sterling. Those measures failed to restore confidence. Britain suspended the pound’s ERM membership later that day, making the crisis a major political and economic embarrassment.
Black Wednesday is often associated with the collapse of the pound’s exchange-rate policy rather than a conventional share-market crash. It nevertheless belongs to the history of financial-market crises because currency trading, interest-rate policy, government credibility, and investor expectations interacted rapidly. The episode also influenced later British debate about adopting the euro.