Black Wednesday

Black Wednesday, or the 1992 sterling crisis, was a financial crisis that occurred on 16 September 1992 when the UK Government was forced to withdraw pound sterling (GBP) from the (first) European Exchange Rate Mechanism (ERM I), following a failed attempt to keep its exchange rate above the lower limit required for ERM participation. At that time, the United Kingdom held the presidency of the Council of the European Union. The crisis damaged the credibility of the second Major ministry in handling of economic matters. The ruling Conservative Party suffered a landslide defeat five years later at the 1997 general election and did not return to power until 2010. The rebounding of the UK economy in the years following Black Wednesday has been attributed to the depreciation of sterling and the replacement of its currency tracking policy with an inflation targeting monetary stability policy.