The Day Before Britain Lost the Pound’s Global Power

Описание: What happened on the tense evening of September 15, 1992 – the day before “Black Wednesday” – that sealed the fate of Britain’s overvalued pound and marked a humiliating blow to its economic sovereignty? In this video, we go inside the critical hours leading up to the 1992 sterling crisis, when a leaked comment from the German Bundesbank president ignited massive speculation, forcing the UK out of the European Exchange Rate Mechanism (ERM) and exposing the limits of the pound’s post-imperial global power.

It all escalated on Tuesday evening, September 15. Bundesbank President Helmut Schlesinger, in what he thought was an off-the-record interview, hinted that a realignment of ERM currencies might be needed and that further pressure on weak currencies like the pound couldn’t be ruled out. The remarks leaked immediately, spreading like wildfire through currency traders. Overnight, speculators – led by George Soros – ramped up bets against sterling, convinced the Bank of England couldn’t hold the line at DM 2.95 to the pound.
By dawn on September 16, the pound was already crumbling.
The Bank of England spent billions intervening, but the leaked Schlesinger comment had shattered confidence. Prime Minister John Major and Chancellor Norman Lamont scrambled in emergency meetings, desperately raising interest rates from 10% to 12% (and briefly threatening 15%) to attract buyers. Yet traders saw it as a sign of panic, selling even harder. This was the moment markets overpowered a major government, costing taxpayers billions.

Black Wednesday’s forced exit from the ERM devalued the pound by 15-25%, ending Britain’s attempt to tie its currency to Europe’s strongest. Many see it as the symbolic end of the pound’s lingering “global power” era – a humiliating defeat that fueled Euroscepticism, destroyed the Conservatives’ reputation for economic competence, and paved the way for UK independence from the euro.

Ironically, the devaluation sparked Britain’s economic recovery: lower rates, booming exports, and growth through the 1990s. Was Black Wednesday a disaster or a blessing in disguise? Did it truly strip the pound of its reserve status, or just expose realities?

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