The United Kingdom was at the center of the 1992 Black Wednesday currency and stock-market crisis.
On 16 September 1992, the British government withdrew the pound sterling from the European Exchange Rate Mechanism after failing to keep it above its required exchange-rate floor. The day followed intense speculation that the pound was overvalued and that Britain could not maintain its commitment without raising interest rates or spending foreign-currency reserves.
The crisis damaged the government’s economic credibility and became a major political setback for Prime Minister John Major. Britain’s exit from the mechanism also meant it did not immediately join the planned path toward the euro. Black Wednesday is often described primarily as a currency crisis, but the turmoil affected financial markets more broadly. It should not be confused with the 1997 Asian financial crisis, which involved several Asian currencies and economies rather than Britain’s exchange-rate commitment.