Sky's Ian King recalls the panic of Black Wednesday on 16 September 1992 and explains how it led to Britain shying away from closer European integration while its neighbours came to create the euro.
It saw the Bank of England burn through nearly £10bn worth of reserves, a vast sum at the time, while interest rates were raised twice during the course of the day - all in a failed attempt to prop up the value of the pound.
Most people thought that the pound had entered the ERM at too high a valuation against the deutsche mark - and that created a massive opportunity for currency speculators such as George Soros.George Soros, pictured in 2012, held a huge short position in sterling that yielded big profits France had also announced a referendum on the treaty and a number of other currencies, notably the lira, were trading at close to the limits of the range under which they were supposed to.
But the damage was done. Speculators like Mr Soros - who is reckoned to have made more than £1bn worth of profits from the event - had already been selling sterling in anticipation of a devaluation and, by the time Wall Street closed that night, the pound had fallen below its ERM floor.Traders react to sterling's plunge at the National Westminster Bank in the City in September 1992
Mr Lamont announced that night that sterling's membership of the ERM would be suspended and the second interest rate rise, to 15%, would not go ahead.It was a humiliation for John Major's Conservative government as great as sterling's devaluation in 1967 had been for Harold Wilson's Labour government. It was defeated by Tony Blair at the subsequent general election.
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