Black Wednesday occurred on 16 September 1992 when the UK Government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM), after a failed attempt to keep the pound above the lower currency exchange limit mandated by the ERM. At that time, the United Kingdom held the Presidency of the Council of the European Union.
In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.14 billion, which was revised to £3.3 billion in 2005, following documents released under the Freedom of Information Act (earlier estimates placed losses at a much higher range of £13–27 billion). Trading losses in August and September made up a minority of the losses (estimated at £800 million) and the majority of the loss to the central bank arose from non-realised profits of a potential devaluation. Treasury papers suggested that if the government had maintained $24 billion foreign currency reserves and the pound had fallen by the same amount, the UK could have made a £2.4 billion profit on the pound sterling's devaluation.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 United Kingdom general election and did not return to power until 2010. The rebounding of the UK economy in the years after Black Wednesday led to a reassessment of the legacy of the crisis, as John Major's government adopted an inflation targeting policy as an alternative to the ERM and set the foundation for a prospering economy in the years prior to the financial crisis of 2007–08, and the British public turned increasingly Eurosceptic.
![Black Wednesday](https://cdn.calendarz.com/uploads/events/september/16/88941/black-wednesday_cp.jpg)
1992Sep, 16
Black Wednesday: The pound is forced out of the European Exchange Rate Mechanism by currency speculators and is forced to devalue against the German mark.
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Events on 1992
- 1Feb
Bhopal disaster
The Chief Judicial Magistrate of Bhopal court declares Warren Anderson, ex-CEO of Union Carbide, a fugitive under Indian law for failing to appear in the Bhopal disaster case. - 1Mar
Socialist Federal Republic of Yugoslavia
Bosnia and Herzegovina declares its independence from Socialist Federal Republic of Yugoslavia. - 2Mar
United Nations
Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, San Marino, Tajikistan, Turkmenistan and Uzbekistan join the United Nations. - 27Apr
International Monetary Fund
The Russian Federation and 12 other former Soviet republics become members of the International Monetary Fund and the World Bank. - 23Jul
Pope Benedict XVI
A Vatican commission, led by Joseph Ratzinger, establishes that limiting certain rights of homosexual people and non-married couples is not equivalent to discrimination on grounds of race or gender.