‘Black Wednesday’ in politics and economics is the name given to the 16th September 1992, when the British Government was forced to withdraw the pound sterling from the ERM (European Exchange Rate Mechanism) after the currency fell below the minimum agreed lower level.
The British government estimated the cost of Black Wednesday to the British public purse to be £3.4bn and trading losses in the city of London for August and September were around £800m. Well known investor George Soros famously made over £1 billion in profit on that day by shorting sterling.
This 1997 BBC documentary looked back at the events which had led up to Black Wednesday and the after effects. Ironically the event stabilized the British economy and brought about the low interests rates that the Bank of England had been trying to achieve by artificially inflating the GBP prior to the crash. Due to the subsequent strong recovery of the British economy some economists actually refer to the day as ‘Golden Wednesday’.