Black Wednesday

Black Wednesday

Black Wednesday is a term used to refer to September 16th, 1992 when UK currency, Pound Sterling, suffered a drastic decline in value which subsequently caused the UK to withdraw from the European Exchange Rate Mechanism (ERM) which is an economic system that was introduced to ensure the economic growth of European nations and required members currencies to maintain a specific minimum value. The UK Pound Sterling could not maintain above the required margin and the UK was forced out of ERM.

Consequences & Effects

Withdrawal from European ERM impact caused Pound Sterling to further.

References

Budd, A. (2005) Black Wednesday - a Re-Examination of Britain's Experience in the Exchange Rate Mechanism. IEA Occasional Paper No. 135. http://dx.doi.org/10.2139/ssrn.734203

Greenway, D. (2012). Policy Forum: UK Macroeconomic Policy After Black Wednesday: Editorial Note. The Economic Journal, Volume 107, Issue 443, 1 July 1997, Pages 1126–1127. https://doi.org/10.1111/j.1468-0297.1997.tb00012.x