Black Wednesday

The sterling crisis in September 1992 was a speculation against the British pound, which nearly brought down the European Monetary System (EMS) to collapse.

George Soros and other investors were of the opinion that the British pound was overvalued and that Britain either devalue the pound or the EMS would leave. Soros and others therefore used a large sums of money to the weakening of the pound. First, the Bank of England still trying to stabilize their currency by supporting purchases. But when the had little effect, they announced on September 16, 1992 announced a rate hike of first 10 % to 12% in order to increase the attractiveness of the pound and to attract investors. Just a few hours later, the central bank to increase the interest rate to 15 % in view. But the speculators ignored this statement and continue to put large sums of money against the British pound, so around 19 clock local time Chancellor of the Exchequer ( Chancellor of the Exchequer ), Norman Lamont, announced that Britain would leave the ERM and interest rates again old on the level of 10 % would be reduced. As a result, the British pound fell over the next five weeks by nearly 15 % against the German mark and by 25 % against the U.S. dollar.

This speculation brought Soros billions in profits and the nickname " The man who broke the Bank of England " one.

Others

In June 1972, there was a sterling crisis, during which the British government withdrew from the snake and the price of the pound could float freely. Against the U.S. dollar and many other currencies it does so without interruption until today (2012 ). From 1990 to 1992, Britain was a member of the EMS (European Monetary System).

The Bretton Woods system collapsed in March 1973; see here. In the fall of 1973, the first oil crisis began. In 1974 there were in the UK a critical development: the inflation rate was 17 %, the unemployment around 700,000, the balance of payments deficit 13 billion euros (then purchasing power was several times higher than today ).

The chosen at the British general election on February 28, 1974 Hung parliament could not agree on a government itself; the then Prime Minister Harold Wilson in September called new elections. In the election on 10 October 1974, the Labour Party won a slim majority ( 319/635 ) of the lower house seats. Nevertheless, they remained the full term until May 1979 at the power ( March 1976 - MAY 1979 James Callaghan ); then Margaret Thatcher was the first Prime Minister of the country.

Footnotes

• Financial crisis
• Foreign exchange market
• History of the European Union
• Event 1992
• Policy in 1992