Which exchange-rate event marked the start of the 1992 Black Wednesday crisis in the United Kingdom?

Sterling’s withdrawal from the European Exchange Rate Mechanism marked the decisive exchange-rate event of the 1992 Black Wednesday crisis in the United Kingdom.

On September 16, 1992, the British government suspended the pound sterling’s membership of the ERM after failing to keep the currency above its permitted band. The day became known as Black Wednesday. Heavy selling followed attempts to defend sterling through higher interest rates and intervention in currency markets.

Britain had joined the ERM in October 1990, linking sterling to other European currencies before the planned move toward monetary union. Economic weakness, high interest rates, and doubts about the exchange-rate level made the arrangement difficult to maintain. Speculators, including George Soros, became associated with the pressure against the pound.

Black Wednesday was primarily a currency crisis rather than a conventional stock-market crash. The withdrawal later allowed Britain to cut interest rates and pursue a more flexible monetary policy. The episode also damaged the governing Conservative Party’s reputation for economic competence.